Belt and Road is more chaos than conspiracy

Is China’s Belt and Road Initiative a bold infrastructure vision, or a slush fund? The question is becoming more pressing.

Chinese officials offered to help bail out state-owned 1Malaysia Development Bhd., kill off investigations into alleged corruption at the fund, and spy on journalists looking into it in exchange for stakes in Belt-and-Road railway and pipeline projects in Malaysia, the Wall Street Journal reported Tuesday.

If proven, that would offer the clearest link yet between the 1MDB scandal and Belt and Road, which is still seen by many as a more effective rival to multilateral investors such as the currently leaderless World Bank and Asian Development Bank.

China has denied that money in the programme was used to help bail out 1MDB.

The common perception is that President Xi Jinping’s flagship foreign policy initiative is an ambitious programme deploying trillions of dollars on necessary infrastructure in emerging Asian and African countries where Western investors lack the animal spirits to tread.

A variant of this view suggests a greater level of Machiavellian foresight. By getting emerging-economy governments caught in debt traps when unviable projects like Sri Lanka’s Hambantota port go belly-up, China is methodically assembling a network of client governments in hock to Beijing and advancing its military ambitions.

Here’s a better argument for what Belt and Road is really about.

Despite Xi’s close association with it, the initiative isn’t ultimately a connected master plan for Chinese global ascendancy.

Instead, it’s better looked at as a somewhat chaotic branding and franchising exercise, a way for the country’s numerous provincial officials and state-owned companies to slap a presidential seal of approval on whatever project they’re seeking to pursue.

“Far from strictly following Beijing’s grand designs, much of the Belt and Road Initiative’s activity to date looks more scattered and opportunistic,” Jonathan Hillman, a senior fellow at the Center for Strategic & International Studies, wrote in an analysis last year.

The Journal’s reporting suggests a scheme cooked up on the fly, with its key planks initially proposed by Malaysian rather than Chinese officials.

By building the railway at a vastly inflated cost, Chinese state companies would be able to get their hands on spare cash and in return assume some of 1MDB’s debts.

If Malaysia’s Belt and Road projects were all part of a grand strategy hatched by China, the execution was incompetent.

According to the Journal, former Malaysian prime minister Datuk Seri Najib Tun Razak did hold talks with Beijing about granting berthing rights to Chinese naval vessels – but the discussion never bore fruit.

Then Najib was voted out of office last year, with his successor Tun Dr Mahathir Mohamad seeking to cancel or renegotiate projects he’s labelled a “new version of colonialism.”