The Maritime Silk Road China's High Seas Ambitions

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Part 2: A Double Standard When Judging China's Intentions?


Mal é, Maldives

One and a half hours by air southwest of Colombo is Malé, the capital of the Maldives and one of the most densely populated cities in the world, with about 130,000 people living in an area of only about six square kilometers.

Two years ago, 20 additional residents moved to Malé -- all Chinese diplomats. China became the first country outside the Commonwealth to send a permanently stationed ambassador to the Maldives. A short time later, Xi Jinping visited Malé. The president of the world's most populous country visited a nation that has a total population not much larger than a single small neighborhood in Shanghai.

Xi's visit wasn't without repurcussions. Joining the 20 diplomats, several hundred Chinese engineers and skilled workers have since moved to the country. A subisdiary of China Harbour is now building a bridge between Malé and the island where its airport is located. Meanwhile, the Beijing Urban Construction Group is reclaiming land in order to build a new runway. A third Chinese consortium is erecting 1,500 apartments, while a fourth is building hotels and a fifth is connecting the islands of the Laamu Atoll, 250 kilometers to the south, with a highway. They are the largest construction projects in the history of the small country, with a total investment sum of more than $800 million.

To Wang Fukang, Beijing's ambassador to the Maldives, it is only logical that China engage itself in the expansion of the Maldives. The country is poor, its economy is fragile and its need for infrastructure huge. At the same time, the number of Chinese tourists visiting the country has risen rapidly in recent years. They now make up one-third of all Maldives travelers. "We had to do something," says Wang.

But Malé is located around 6,000 kilometers from Beijing. The Indian coast, on the other hand, is only 500 kilometers away and the US Air Force's Indian Ocean base at Diego Garcia is only 1,300 kilometers distant. Do leaders in Beijing not understand that, at a time when they are massively expanding their maritime power in the South China Sea, their activity in the Indian Ocean is going to alarm other larger nations?

"We know that India is watching us very closely," says Ambassador Wang. "But India is a superpower and doesn't need to worry. Our exclusive interest in the Maldives is economic cooperation."

Civil engineer Lin Shukui, 40, who is managing construction of the airport bridge, stands on scaffolding 10 meters above the turquoise-colored ocean, his shirt soaked with sweat. He says his main problem is the porous limestone he has to drill through to get to the bedrock, necessary to install around 100 piers without causing too much damage to the reef.

He becomes self-conscious when it comes to one question: What kind of profit will his company be making on this project? Lin exchanges glances and a few words with his colleagues before they agree on an answer: The "Bridge of Chinese-Maldivian Friendship" is not a commercial project, but rather serves the purpose of the name it has been given.

Some hotels being built by private Chinese firms may ultimately be profitable, but most of the other Chinese projects on the islands appear to be similar to Lin's friendship bridge: They are favors being provided by Beijing, which may one day be called in. When, for example, the country seeks international support for its own controversial island policy in the South China Sea.

Dubai, United Arab Emirates

Management consultant Cong Hongbin, 55, is sitting inside the Dubai International Financial Centre wearing a wrinkled linen suit. He hails from the imperial Chinese city of Xi'an, once the starting point of the legendary Silk Road, but for the past few years, he's been living in Dubai, the economic hub of the Arab Middle East.

Cong is a Chinese patriot, but he has also lived abroad for long enough to be able to translate the Communist Party's "understanding among nations" jargon into understandable words.

Of course, Cong says, China is pursuing strategic goals with some of its projects. A look at the map -- indeed, the port construction in Colombo, in Gwadar in Pakistan and, as announced last year, in Djibouti on the Horn of Africa -- leaves room for no other interpretation. In the case of the new base in Djibouti, Beijing is no longer denying the military purpose as it did earlier. The Chinese navy is participating in the battle against pirates off the coast of Somalia and also wants to be prepared for further crises in the Middle East.

"But in the search for a 'hidden agenda' on the part of Beijing, I would warn against overlooking China's primary interest -- making money," says Cong. Increasingly, he says, that also holds true for state-owned companies.

Far from the gold-plated faucets of the Burj Al Arab hotel, the Jumeirah Lake Towers rise into the sky in southern Dubai, a small forest of high rises where Chinese state-owned companies have their Middle Eastern headquarters. One is China State Construction Engineering, China's largest construction company.

From the Emirates to Oman to Saudi Arabia, the company is building five-star hotels, skyscrapers, universities, worker camps, "anything that is profitable," says Bao Zhao, deputy head of the company's Middle East business. He lived in Frankfurt, Germany in the 1990s and says that Chinese construction firms are doing today what German and European companies like Hochtief, Strabag or Bilfinger+Berger were doing 30 years ago, when they built everything from cities to highways in countries ranging from Iraq to Nigeria.

Bao doesn't understand the Europeans' suspicion that there are somehow sinister intentions behind every major Chinese project. Western governments too, he says, have also occasionally launched unprofitable construction projects out of political considerations. "Believe me," he says, "China's large state companies are very conservative. If the interest rates aren't right, or if we don't get the permission of a government in question, then we just don't do it. We aren't working for charity."

Tel Aviv, Israel

Around 30 kilometers south of the Lebanese border lies Israel's largest port, located in the Bay of Haifa. In 2015, Shanghai International Port Group acquired the concession as the sole operator of the port for 25 years. It's the company headed by Yan Jun in Shanghai.

Israel's second biggest port is located around 30 kilometers north of the border to the Gaza Strip. The country processes the majority of its commodities exports at Ashdod and the Israeli military also obtains its materiel through this port. In mid-2014, China Harbour Engineering Company landed the winning bid to build a terminal in Ashdod that will be able to process ultra-large container ships.

Israel's third largest port is located near Eilat on the Red Sea. The Israeli government intends to build a train connection between the port and Ashdod, creating a land bridge that could be used instead of the Suez Canal in the event of another war in the Middle East. In 2012, Jerusalem signed a cooperation agreement with Beijing for the Chinese to co-finance and build the railway line.

Surely, a country that takes its security as seriously as Israel does has carefully considered and held extensive discussions about who it is entrusting three of its most important infrastructural facilities to.

"Not really," says Oded Eran of the Institute for National Security Studies in Tel Aviv. When the Chinese acquired Israel's largest dairy products manufacturer, when they considered buying one of the largest insurance firms and when they invested around $150 million to develop a new Guangdong campus of Technion, the Israel Institute of Technology, there was much more public fuss about it.

When it comes to national security, Eran is a knowledgeable man. He served as head of the economics department at the Foreign Ministry and also as Israel's ambassador to the EU and Jordan. He sees two different doctrines driving China's plan for a Maritime Silk Road.

In the South China Sea and the Indian Ocean, the strategic approach dominates. In order to secure its coastal waters and its energy and trade corridor, the country has lined up an array of strategically placed ports and trading hubs. Geo-strategists call it the "String of Pearls." With an export volume of more than $2 trillion, four-fifths of which are transported by ship, he says, it is no wonder that China wants "secure, efficient and inexpensive transport routes."

In the Mediterranean, where, among others, China operates major container terminals in Port Said, Ashdod and Piraeus, the country is largely following an economic doctrine, he says. So far, there is "no evidence to suggest that China is seeking a solid and permanent military presence in the Mediterranean," says Eran.

"Still," he adds, "the countries located along the Maritime Silk Road should take a very close look at just how many of their economic and infrastructural assets they are ceding to China."

But Eran sees no reason for panic, not even in his own country. China, he says, often generates unease with political steps that wouldn't raise an eyebrow if taken by other global powers. This may be linked to the lack of transparency in Chinese politics.

So what lessons can be drawn by Germany and Europe three years after Beijing announced the "21st Century Maritime Silk Route Economic Belt"?

One thing stands out: For the most part, it is relatively small coastal countries in which China in investing particularly large amounts of money -- and they often have a problem that few would be able to solve aside from Beijing. They are countries with weak infrastructure like Burma, Bangladesh or the Maldives, an incompetent construction industry like Pakistan or major fiscal problems like many countries in the Middle East are currently experiencing -- or Greece.

No major power would become a world power without exploiting geostrategic opportunities. It was no coincidence that China got involved in Sri Lanka after former patron India pulled back. Nor is it likely to be a coincidence that it is strengthening its presence in Israel and Saudi Arabia right at a time when these countries are alienating themselves from their protective power, the United States. A disunited or even disintegrating Europe would provide a further political opportunity for China. Still, though, steadfast democracies and economically strong countries have no reason to fear China's new weight.

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bohdrewsen 09/09/2016
1. China's high seas ambitions & new silk road
A couple of most interesting articles indeed. Much can be said about China but at the very least they have ambitions, plans and goals in order to develop their country, their economy and their reach. If only the same could be seen in the EU which has become more and more irrelevant in shaping the future of the world. We need some of the drive that characterizes China and other parts of Asia or we end us as a giant musEUm.
kipa4 09/11/2016
2. China's New Silk Road
Not to worry, Germany has the naval capacity to secure trade routes throughout the world's oceans. If China attempts to use restricting navigable waters as an economic weapon, Germany and its EU partners are more than capable of maintaining free navigation of crucial water-ways. Besides, the EU has the economic clout and wherewithal to persuade the Chinese that it's in their best interest to promote unencumbered sea trade. If China is enhancing its trade routes, it can only benefit Europeans as the greater access the Chinese have to quality EU goods means economic gains. What's not to love ?
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