Will Coronavirus Curtail China’s Global Ambitions?

Edson Owusu

In this long read, our Chief Editor, Edson Owusu, uses the lens of China’s Belt and Road Initiative to explore the potential impacts of the coronavirus pandemic on China’s foreign policy aspirations.

As countries around the globe shut their borders and imposed varying scales of lockdown to try and curtail the spread of coronavirus, one major concern for governments was the repatriation of their citizens. This logistical conundrum involved considerations of cost, negative publicity generated by frustrated and trapped holidaymakers and cruisegoers, diplomatic implications, and, in many cases, the necessity of rapidly creating testing procedures and quarantine facilities to deal with the threat of citizens bringing the virus back with them from corona-hotspots.

However, as China’s rate of infection plateaued and the lockdown in Wuhan was gradually eased and eventually lifted, the Chinese government encountered the reverse of the repatriation conundrum; the ability of their citizens to travel and work abroad had been severely curtailed. By the beginning of April, Think Global Health had identified nearly a hundred countries and territories which had imposed some form of travel restriction on China. Thus, while life begins to regain a certain degree of normality inside many Chinese towns and cities, for the firms, institutions and government officials who rely on connections with the world outside China’s borders in order to make profit or achieve their objectives and protect their interests, it could be a dangerously long time before things return to ‘normal’.

Arguably, the multifaceted, big-budget, and now ostensibly precarious Belt and Road Initiative represents the most high-profile convergence of Chinese interests that will be hindered by the direct and indirect effects of the coronavirus pandemic. The Belt and Road Initiative has been a long-term cornerstone of China, and Xi Jinping’s foreign policy and diplomacy. In a speech delivered in 2014, Xi outlined what he believed to be the ‘China dream’; “the inner meaning of upholding and developing socialism with Chinese characteristics”. The essence of this dream was “a rich and powerful country, revitalizing the nation and enhancing the well-being of the people.” In the previous year, Xi had publicized plans to create an economic land belt which would link China with Mongolia, central Asia, Russia, Iran, Turkey, the Balkans, central and eastern Europe, Germany, and the Netherlands. In a subsequent speech, the Chinese Prime Minister, Li Keqiang, used a visit to South East Asia to announce the creation of a Maritime Silk Road, which would link South-East China with South East Asia, India, Bangladesh, the Persian Gulf, the Horn of Africa, the Mediterranean, and North-Western Europe. These twin projects, the embodiment of the development strategy termed as the ‘Belt and Road Initiative’ or BRI, are a vital facet in Xi Jinping’s quest to solidify his legacy and facilitate the realisation of the ‘Chinese dream.’

A map of the Belt and Road and Road Initiative. (Source: World Bank, 2018)

Evidently, given its geographical scope and geopolitical ambitions, connectivity is the fundamental essence of BRI; connectivity is vital to construction of the railways, pipelines, and ports that will form the land belt and maritime silk road, and once BRI is completed (by 2049, if Chinese estimates are correct), the degree to which it has enhanced economic, strategic and cultural connectivity, both around the globe and between China and the rest of the world, will be a key measurement in evaluating its degree of success or failure. Yet, as borders close, as land, air, and sea traffic plummets, and terms such as ‘social distancing’ and ‘isolation’ become entrenched in the global lexicon, the connectivity embodied by BRI seems to be the antithesis of the contemporary zeitgeist, even as people strive to stay in touch through various technological means.

A number of multi-billion-dollar BRI projects have already been disrupted, including the flagship $5.5 billion Jakarta-Bandung high speed railway and a $10.6 billion East Coast Rail Link in Malaysia, with Chinese construction workers either barred from travelling or quarantined on arrival. If lockdowns and travel restrictions persist into the medium and long-term, there is a substantial risk of investors cutting their losses and projects being cancelled as delays become too costly for stakeholders, which, in the worst case scenario for China and Xi Jinping, could culminate in the termination of BRI if the number of scrapped projects makes the competition of the initiative untenable.

One particularly acute risk to BRI and to China’s general economic health is that of a debt crisis. By 2018, the collective financial debt owed by the rest of the world’s states to China had exceeded $5 trillion. A widespread debt crisis among its debtors would likely force China into politically and financially difficult debt restructurings. Numerous BRI countries, including Angola, Belarus, Djibouti, Malaysia, the Maldives, Mongolia, Mozambique, Oman, the Republic of Congo, Vietnam and Zambia, have been identified as being particularly vulnerable to currency and debt crises as their export revenues fall due to COVID-19 related disruption. While there is no guarantee that debt renegotiations would be successful, the BRI would almost certainly be derailed, at least temporarily, by such a crisis.

The material effects of the coronavirus pandemic on BRI will likely be worsened by the damage done to China’s reputation. Numerous countries in Asia and beyond were already reluctant to engage with BRI before the pandemic, with disputes over territorial claims in the South China Sea and concerns over debt traps and the financing mechanisms used for infrastructure projects. Last year, then-Malaysian prime minister Mahathir Mohamad succeeded in pressuring China to restructure the BRI contracts for the East Coast Rail Link, wiping over $5 billion from the initial cost, having publicly stated that the BRI could develop into “a new version of colonialism”. The Chinese requisition of the Hambantota Port in Sri Lanka, after the latter state was unable to pay its debts to the former, suggests that worries over the potential implications of engagement with BRI are justified.

The distrust that helps to fuel such concerns will only be accentuated by the accusation that China’s suppression of the severity of the coronavirus outbreak in Wuhan was a crucial factor in transforming an epidemic into a global economic and health crisis. Some politicians and analysts have expressed significant anti-China sentiments in their analysis of the coronavirus outbreak. An opinion piece that appeared on the website of the Washington-based Foreign Policy magazine in April stated that “COVID-19 really is the “Chinese virus,” even if U.S. President Donald Trump has lately promised to stop using the term.” Its author also linked the pandemic to BRI, describing the theorised spread of the 14th century bubonic plague along the ancient Silk Road before commenting that “when Italian Prime Minister Giuseppe Conte led Italy into China’s Belt and Road Initiative around this time last year, he was probably hoping for a wave of Chinese investment to boost Italy’s moribund economy. In the end, he has had to contend with a different import from China: COVID-19.”

The Foreign Policy opinion piece was far from the first commentary to suggest a causal link between BRI and coronavirus. In response, China has actively sought to mitigate against the highly damaging prospect of BRI being perceived primarily as a transmission belt for infection. In conjunction with the wider goal of protecting its global reputation, the Chinese government and firms such as Huawei involved in BRI projects, have provided dozens of countries with a mixture of financial support, medical supplies such as ventilators, medicines and PPE, as well as teams of healthcare experts and professionals. On March 16, Xi Jinping launched a diplomatic soft power offensive which started with a telephone call to the Italian prime minister Giuseppe Conte, offering Chinese cooperation on the international “building of a Health Silk Road.” This offensive continued through telephone conversations with numerous leaders in the EMEA region, and it indicated that a Health Silk Road might form an important element in current and future efforts to rejuvenate and redefine BRI, allowing China to position itself as a global health leader that its allies can depend on, both in times of crisis and prosperity.

Alongside the Health Silk Road, China is also able to highlight and promote other elements of its state apparatus that were instrumental in curtailing coronavirus internally. Extensive surveillance and monitoring systems were arguably as vital to the success of Chinese lockdowns as its healthcare system. Indeed, a South Korean-born German philosopher, Byung-Chul Han, has predicted that “China will now be able to sell its digital police state as a model of success against the pandemic. China will display the superiority of its system even more proudly.” As states reel from the human and economic cost of the coronavirus pandemic, some governments may become more receptive to arguments that the restriction of certain civil liberties, particularly the right to privacy, is a price worth paying for the increased security that an extended surveillance regime might bring.

Over the course of the twenty-first century, China has made vast economic strides. In 2010, China overtook Japan to become the world’s second largest economy, and by June 2014, the Chinese foreign exchange reserves amounted to nearly $4 trillion, having grown by over $3.7 trillion since 2001. This prolonged economic development put Xi and the Chinese state in the financial position of being able to launch a project as ambitious and expensive as BRI. Furthermore, the perception among policymakers and academics that “America’s unipolar moment has passed, and that we are in the midst of a grand shift of power from the West to the East” has imbued China with the confidence to outline and follow a more assertive, proactive foreign policy that makes use of its economic leverage and soft-power tools to ensure that geopolitical, geo-economic, and security environments within which China operates are more favourable towards its continued development and growing influence. BRI is a concrete manifestation of this, and while the coronavirus pandemic poses a multitude of threats, both to BRI and to China’s wider interests, its success in tackling the virus within its own borders, juxtaposed against the continued struggle of European states and America to do the same, means that China has the capacity to emerge from this crisis in a position of relative geopolitical strength.