For some time, we have commented on China’s Belt and Road initiative to provide massive infrastructure projects in developing countries in order to access raw materials and, in turn, a transportation route for Chinese goods. Typically, these projects include massive loans to the countries involved as well as Chinese project management which is complete down to most of the laborers who are released Chinese convicts. The indebtedness assumed by a majority of the countries involved is well beyond their ability to ever repay. There are port facilities involved in the maritime portion as well as roads, rail facilities and power projects on the overland portions. The effort was launched in 2013 by President Xi Jinping, “Emperor for Life,” to transform China’s economic and political influence.
You will note below that the maritime path goes past Djibouti around the Horn of Africa. That endeavor resulted in massive loans to Ethiopia which undoubtedly had a definite influence over the Ethiopian Tedros Adhanom’s reluctance, as head of the World Health Organization, to defer the announcement of the unfolding Covid-19 virus until January 25. The tardiness in the announcement allowed millions of infected Chinese from Wuhan, China to spread it around the world. Moreover, as the Council of Foreign Relations commentary indicates, many of the participants in the Belt and Road endeavor are thought to be close allies of the United States. Therefore, Chinese control of those countries may diminish their alliance with the U.S.
In the past, we have also posed the question of what happens in the event of default due to the host countries inability to pay back its indebtedness? You will note in the first dash in the brown line above, moving south from China toward Malaysia, that a sliver of the “Road” portion of the initiative passes through the land-locked country of Laos where pristine scenery is being compromised by railway bridges and hydropower dams. Well, lo and behold Laos - one of our favorite places on the earth - was the first to default on Chinese debt repayments. The Bangkok Post recently reported a Chinese Firm Will Run the Lao Electric Grid. Accordingly, Laos will cede control of its electric grid to a Chinese company in order to stave off a debt default.
Therefore, it is pretty clear to the gentle Lao people, “Play ball or we will turn your lights off.” Somehow the Lao rice paddies were more interesting in the old days without the power transmission lines, shown below, which are not even controlled by the country suffering the environmental transformation. Perhaps Laos will return to the old days when kerosene lamps were common upcountry, though additional illumination was often enhanced by “the rocket’s red glare.”
It is unclear whether the Belt and Road initiative is winning “the hearts and minds of the people” which is an arcane adage of warfare that was last attempted during the Vietnam War. The clearest example of its failure was in the Viet Cong stronghold of Cholon, the Chinatown neighborhood of the capital of Saigon that was bombed into oblivion. A friend who had a phosphorous grenade bounce off his leg while riding in a pedicab in Cholon was not sympathetic. Nonetheless, the destruction of the neighborhood, as evidenced below, did not sit well with the Republic of Vietnam Government supporters who lived there.
Accordingly, it is a bit late to win “the hearts and minds” of the people when issues evolve into a wartime setting. Over the years, I have found some of the closest bonds between the people in different countries go back to their formative educational days in a country that is not their home. During the colonization era, it was used to develop a similar culture and identity between a colony and its foreign master. The British as well as the French were quite adept in this effort. Learning the language, customs and witnessing the democratic system of the U.S. can provide a powerful bond. The U.S. has assumed a prominent role as a magnet for international students, most notably Chinese. However, this position may be changing.
The Nikkei Asian Review recently published an article entitled Trump and COVID Force Chinese Students to Rethink the US. It turns out that foreign students provide a major level of support for U.S. universities as state governments began paring their support back in the 1990s. In fact, these institutions are dependent on full tuition-paying foreign students of which one-third of them are mainly from wealthy Chinese middle-class families generating some $170 billion per year of revenue. The top ten breakdown of foreign students in U.S. universities are shown below.
The COVID-19 pandemic and overall xenophobia have not helped this level of support and many Chinese students are questioning why they are stuck in the U.S. at such a time. There is no doubt the virus originated in Wuhan, China but the outbreak has been contained there while it continues to run rampant in the U.S. Moreover, it was not helpful when Trump struck out the reference to COVID in a speech, shown below, and coined the term “Chinese” virus. Accordingly, Chinese students have been shunned and face discrimination.
Moreover, when they seek to return home, the students are covered by the “China Initiative” to hand over their electronics to be searched as a protection from technology thefts often causing them to miss flights. Their final impression may be the most lasting one for some of the approximate 400,000 Chinese students in the U.S. representing a reasonable portion of their future leadership. It is hard to win the “the hearts and minds of the people” when you subject the future leaders of the country to humiliation in their formative years on your soil, only to explain away your own inadequacies.
In the midst of the pandemic, the U.S. has been seeking to bolster the resolve of the Republic of China government in Taiwan to stand tall in the midst of “Emperor” Xi Jinping’s keen interest in bringing it back into the People’s Republic of China. On September 18, the Republic of China tweeted that a number of mainland bomber and fighter aircraft had edged over into their airspace as a warning in light of a visiting U.S. diplomat in Taipei. One of the mainland visitors is shown below.
Accordingly, we may be approaching a Cholon moment (the Chinatown of Saigon or Ho Chi Minh City, Vietnam of today) where the super-powers bomb each other back into the Stone Age, or we try to get to know each other a bit better and truly develop a common understanding going forward. In reality, that process may require another generation to grasp the concept but maybe it is not too late to support that initiative. Therefore, the question remains -- Chinese Checkers or Checkmate? “Checkmate” might make climate change look benign in comparison. No matter what, the Chinese students leaving the U.S. have to admit they received “red carpet” treatment on the way out with “Emperor Xi” welcoming them home.
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