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One Belt One Road: A Brand-New Strength for a Deep-Rooted China- Madagascar Partnership

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China and Madagascar have a very long-term relationship. Their connection finds its way back in history. A silky road has already tied the two countries centuries ago. Indeed, from the 13th and 14th centuries, in the Yuan dynasty, China already had three routes to Africa, one of them includes Madagascar.

In the 19th century, a number of Chinese people settled down in Madagascar, it can explain the existence, especially in the coastal regions of the island, of a generation of Chinese, also called “ancient Chinese in Madagascar” who differs from the newcomers. If the former was seeking for shelter, the latter is more focused in business and is investment-oriented.

This friendly exchange was later, in 1972, materialized by the establishment of diplomatic relations. The ratification of the relationship between the two countries strengthened the friendship which has promoted the bilateral cooperation. These projects are divided in various fields.

Since then, the two countries have a prosperous partnership, not to mention that China has become the largest commercial partner of Madagascar.  

Nowadays, Madagascar is one of the African countries that polled the most number of Chinese nationals. The question is how one belt one road can strengthen the relationship between the two countries? 

One belt one road is a promise of a new level of cooperation that will have a considerable impact into the development of the two countries.

As we know, the One Belt One Road project, launched by China in 2013, involves the participation of several countries from different continents all over the world, including Africa. This call can be considered as an express manifestation and a reiteration of China’s willingness to cooperate with the African continent.

While some researchers are studying the motivation of China’s approach to African States, others are more focused on the studies of practicability and the benefits (both short-term and long-term) of this latter.

In the beginning of this year 2017, China has engaged on an African tour with a successive visit of Chinese representatives in different countries.

Madagascar has been connected to this Chinese representatives’ itinerary and was the first State to honor the Chinese Foreign Affairs Minister Wang Yi. During his visit, he has warmly welcomed the participation of Madagascar in the One Belt One Road initiative.

This invitation has been acknowledged, a few months later by Madagascar. It was brought to pass by an official visit held in Beijing between the two leaders, respectively the President Xi Jiping and the President Rajaonarimampianina Hery. This official visit advances a mutual desire to intensify diplomatic relations and particularly economic relations.

Through the areas involved in this project, we can already have a clear idea about the advantages of both parties.

First, thanks to its geographical location, Madagascar may represent a geostrategic pillar to connect Africa with China in the proposed shipping route. Madagascar, the fourth largest island in the world and situated in the Indian Ocean is the African country with the closest access to China geographically. This may explain China’s choice of making Madagascar the bridge between Africa and China. Thus, Madagascar has undeniably a role to play to the accomplishment of this structure.

President Rajaonarimampianina says that Madagascar not only supports the construction of ports and airports but also will bring its support in the field of energy and aviation.

Moreover, the official visit of Malagasy’s President in China, was also accompanied by the signature of different categories of cooperation. These agreements engage the domain of fisheries, agriculture, security and the application of the law.

The Sino-Malagasy relationship through this project One Belt One Road indeed implicitly agrees the existence of alliance between the two countries. The construction of this infrastructure would concretize the proximity of the two countries. This opens the opportunity for China to have a strategic partner in the Indian Ocean. As for Madagascar, it will be an opportunity to make its ascension on the international scene by participating in a project linking several recognized and powerful actors.

Second, as one of the poorest countries in the world, Madagascar’s participation in the one belt one road project is a major contributor to the country’s development. The Minister of Foreign Affairs of Madagascar emphasizes that: “this project will enable our country to integrate its economy on a global scale through the establishment of infrastructures linked to industrialization and trade, namely sea and river ports, railway construction …”

China, on the sidelines of its visit, has announced several donations for this year 2017. These donations include the construction of 200 drinking water wells in the south-west of the country (in the regions of Menabe, Atsimo Andrefana), the construction of a 19 km road known as the “egg route”, to open up the Mahitsy region, which produces chicken eggs and is connected to the RN4, the donation of two coastguard ships, and the financing of works to rehabilitate the buildings of the Malagasy Ministry of Foreign Affairs, estimated at 1 billion ariary (280,000 euros), the whole without counterpart.

Infrastructure is indeed at the center of development insofar as it facilitates the linking of the regions of the island. Indeed, one of the biggest problems encountered in the country is the isolation of several productive regions or districts. The presence of roads and railways would make it possible to establish a link between these regions and the capital in order to make these productions profitable.

Even though the relationship between the two countries is deep-rooted, it encounters some limits.  In fact, some Malagasy natives are reluctant and remain on the defensive when discussing the subject of cooperation with China. Indeed, the experience of Madagascar, especially the population living in exploitable and exploited mining areas, returns a negative image on the presence of investors in Madagascar. Fortunately, China has reformulated its willingness to respect the law by calling all its investors to follow the binding rules in Madagascar.

Besides, these projects might raise concern and conflict with some other partners of Madagascar, particularly, France. In fact, France as a former colonizer of Madagascar still keeps a jealous eye on the big island.

[1] in the daily newspaper of Madagascar

PhD Candidate in International relations at the School of International and Public Affairs, Jilin University China. Currently conducting research on international sanctions, power politics, international law, foreign policy and bargaining strategy. Holder of a MPhil in Public law &Political Science and a Master degree in Business and international law, my focus has been writing and conducting research on international political economy, international investments, interregionalism / regionalism, democracy.

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East Asia

Ukraine’s losses are China’s gains

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A woman walks past sandbags piled for defensive protection, in Odessa, Ukraine. © UNICEF/Siegfried Modola

The conflict in Ukraine will have major strategic consequences for Chinese foreign policy in the Indo-Pacific. It will promote the deepening of Russian–Chinese economic cooperation that will make both countries more resilient to Western economic pressure. Long-term instability in Europe will make it more difficult for the United States to boost its Pacific presence for years to come with significant US financial and military resources being drawn toward supporting Ukraine.

The conflict has demonstrated that the West is not able to impose sanctions on a major economy without damaging its own stability. The war has also shown the effectiveness of the Russian nuclear deterrent, making even a limited Western intervention unthinkable.

China will be the main beneficiary of the Ukraine crisis. But this is not reflected in China’s political rhetoric which has been carefully calculated to avoid any major fallout with the European Union and other developed countries, while also maintaining close cooperation with Russia.

The official Chinese position has remained consistent with the statement made by Chinese Foreign Minister Wang Yi in February 2022 at the outbreak of the war: China is concerned with the violence and wants it to stop. It maintains that the territorial integrity and security interests of all parties need to be respected. China also maintains that NATO enlargement is partially responsible for the crisis.

On the economic front, China has seized the major strategic opportunities provided by the war. During the first four months of 2022, trade between Russia and China increased by 25.9 per cent. Russian exports to China grew by 37.8 per cent, to US$30.85 billion. The physical volume of natural gas exports also jumped 15 per cent.

China is in line to supplant the European Union as Russia’s main economic partner. The Chinese Ambassador to Russia Zhang Hanhui has called upon Chinese businesspeople to ‘fill the void’ left in the Russian market by outgoing Western businesses. Cooperation with China has contributed to Russia’s federal budget surplus between January–April 2022 despite the war. Maintaining this financial and economic stability appears to be Russia’s strategy as it continues to press in Ukraine.

By 2023, most or all bilateral trade is expected to be conducted in renminbi. Chinese companies and brands will likely dominate large segments of the Russian consumer market and will become Russia’s key industrial and technological partners. There is also a growing trend towards a large part of Russian trade being conducted with third countries in renminbi.

With the expected expansion of the logistical infrastructure, China will obtain a major source of strategic commodities. China will be able to procure these commodities at significant discounts because Russia will be isolated from many other markets and China will be using its own currency. This will significantly reduce the West’s ability to leverage economic pressure points against China.

Some of China’s top-tier global companies are visibly reducing their presence in Russia because secondary sanctions could affect their operations in international markets. But cooperation in many areas will be overtaken by second-tier corporations with limited or no global exposure. Such companies will still be powerful enough to operate in the Russian market. Their operations will be serviced by specialised banks with no exposure in the West, like in Iran.

Strategically, this transition — coupled with deep internal changes in the Russian political economy — will make Russia largely immune to economic warfare. For the foreseeable future, the West will have no other means to deter Russia in Europe except for costly military options. In turn, this will provide major strategic opportunities for China in the Pacific.

The military lessons of the war for China are too early and too difficult to assess based on available data. One characteristic of the Ukrainian conflict is an unprecedented scale of propaganda and misinformation from all sides.

But two clear lessons have emerged from the war so far. First, US and NATO allies will always try to avoid a direct military confrontation with a major nuclear power. Even if a power is fighting a full-scale war at their doorstep. Second, economic war on Russia has caused significant problems for Western economies, including rising inflationary pressures and falling growth rates. Any comparable actions against China, an economy ten times bigger, will devastate much of the world economy. This makes any such action extremely unlikely.

From our partner RIAC

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Taiwan dispute, regional stability in East Asia and US policy towards it

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In the 1950s, armed confrontation erupted between the People’s Republic of China (PRC) and the Republic of China (ROC) over vital islands in the Taiwan Strait. ROC-controlled islands were bombarded by the PRC on two distinct occasions in the 1950s. The US retaliated by acting actively on favor of the ROC. Tensions in the Taiwan Strait were exacerbated by US policy toward East Asia during the early Cold War. In late 1949 and early 1950, American authorities were prepared to allow PRC forces to cross the Taiwan Strait and defeat Chiang, but when the Korean War broke out in June 1950, the US moved its Seventh Fleet into the Taiwan Strait to keep the conflict from expanding south. The advent of the Seventh Fleet enraged the Chinese Communists, who moved soldiers from Taiwan to the Korean front in preparation for an attack. This served to postpone military conflict in the Strait until after the Korean War, when the US withdrew its fleet.

Beijing claims there is only “One China,” of which Taiwan is a part. It considers the People’s Republic of China to be China’s only legitimate government, a position it refers to as the “One-China concept,” and desires Taiwan’s eventual “unification” with the mainland.

China, Mongolia, Taiwan, Tibet, and the South China Sea remain part of the ROC, according to Taiwan’s KMT-drafted constitution. The KMT opposes Taiwan’s independence and has repeatedly advocated for tighter ties with China. However, in light of recent election setbacks, KMT leaders have pondered whether the party’s position on the 1992 Consensus should be changed. The Democratic Progressive Party (DPP), the KMT’s main adversary, has never supported the 1992 Consensus’s understanding. President Tsai, who is also the DPP’s leader, has refused to recognize the consensus in writing. Instead, she has endeavored to find a different formulation that Beijing will accept. Tsai declared she was “Elected President in accordance with the Constitution of the Republic of China,” which is a One-China document, and that she would “Safeguard the Sovereignty and Territory of the Republic of China” in her 2016 inaugural address. Tsai also promised to “Handle Cross-Strait Affairs in accordance with the Republic of China Constitution, the Act Governing Relations Between People of Taiwan Area and the People of the Mainland Area, and other applicable legislation.” Beijing, on the other hand, rejected this statement and severed ties with Taiwan.

UN Membership Status for Taiwan

China directly rejects the participation of Taiwan in other international organizations that only allow governments to join. Taiwan complains its absence on a regular basis, while the US advocates for Taiwan’s meaningful involvement in such groups. Taiwan, on the other hand, is a member of over forty organizations, the most of which are regional in nature, such as the Asian Development Bank and the Asia-Pacific Economic Cooperation Forum, as well as the World Trade Organization. On several additional bodies, it has observer or other status. Only fourteen countries have formal diplomatic relations with Taiwan. No government has ever maintained formal diplomatic relations with both China and Taiwan at the same time.

Economic Situation of Taiwan

Taiwan’s economy is still based on trade with China, the island’s most important commercial partner. However, their economic relationship has been strained in recent years, partially as a result of Beijing’s pressure on Taiwan and Taiwanese leaders’ rising concerns about the island’s overdependence on Chinese trade. President Ma, who served from 2008 to 2016, signed over twenty agreements with the PRC, notably the 2010 Cross-Straits Economic Cooperation Framework Agreement, in which the two countries agreed to remove trade barriers. Direct sea, air, and mail ties between China and Taiwan were reestablished after decades of prohibition. They also agreed that banks, insurers, and other financial service providers would be permitted to operate in both markets. Tsai’s main program, the New Southbound Policy, has had some success in increasing trade and investment with Southeast Asian and Indo-Pacific countries. Between 2016, when the project was announced, and 2021, trade between Taiwan and the eighteen nations increased by more than $50 billion. Nonetheless, Taiwan’s exports to China reached an all-time high in 2021. Beijing has exerted pressure on other countries to refrain from signing free trade deals with Taiwan. Only a few nations have signed free trade agreements with the island, with New Zealand and Singapore being the only industrialized economies to do so.

US-Taiwan Relations

The United States and the People’s Republic of China established formal diplomatic ties in 1979. At the same time, it cut diplomatic ties with the ROC and terminated their mutual defense treaty. However, the US maintains a strong unofficial relationship with the island, selling defense weapons to its military. Beijing has frequently pushed the US to stop sending weapons to Taiwan and to cut ties with the country. The United States’ strategy is guided by its One-China policy. It is based on a number of documents, including three US-China communiqués issued in 1972, 1978, and 1982; the Taiwan Relations Act, passed by the US Congress in 1979; and President Ronald Reagan’s recently disclosed “Six Assurances”, which he delivered to Taiwan in 1982. According to these documents, the United States:

“Acknowledges the Chinese stance that there is only one China and Taiwan is a part of China” and that the PRC is the “only lawful government of China”

Disposes the use of force to resolve the conflict; maintains cultural, commercial, and other ties with Taiwan through the American Institute in Taiwan (AIT), commits to selling arms to Taiwan for self-defense and maintains the ability to come to Taiwan’s defense while not committing to do so, a policy known as Strategic Ambiguity was created.

The major purpose of the United States is to maintain peace and stability in the Taiwan Strait and it has urged both Beijing and Taipei to do so. It declares that it opposes Taiwanese independence. For decades, the US has tried to strike a careful balance between backing Taiwan and avoiding a confrontation with China through its policy of strategic ambiguity.

Over Chinese protests, the US strengthened ties with Taiwan under President Donald Trump, selling over $18 billion in armaments to the military and erecting a $250 million facility for its de facto embassy in Taipei. Tsai and Trump spoke by phone before Trump’s inauguration, the greatest degree of engagement between the two since 1979. He also dispatched several top administration officials to Taipei, including a cabinet member, and the State Department lifted long-standing limitations on where and how US officials can meet with their Taiwanese counterparts during his final days in office.

Biden’s Administrative and Military Relations with Taiwan

The Biden administration has taken a similar approach, maintained arms shipments and endorsed Trump’s decision to allow US officials to meet with Taiwanese officials more freely. Biden was the first president of the United States to invite Taiwanese officials to the inauguration. The US regularly sails ships across the Taiwan Strait to demonstrate its military presence in the region, and it has encouraged Taiwan to raise its defense budget. The United States has been more supportive of Taiwan in recent years than it had been before China adopted a rejectionist stance toward the current Taiwanese government. On cross-strait problems, Tsai has been noticeably and consistently moderate. The fact that she would push the limit by declaring full formal independence is not a risk Beijing has to be concerned about. During Tsai’s presidency, Washington has increased its support for Taiwan, primarily in response to Beijing’s increasing pressure on the island. The Biden administration has a variety of grievances about Chinese behavior and its coercion of Taiwan has been towards the top of that list, as seen by congressional legislation and presidential and administration policy comments.

U-S Implications for Strategic Stability over Taiwan Issues

Strategic stability refers to a condition in which both the United States and China can pursue their key national interests without jeopardizing, if not increasing, regional and global stability. Such strategic stability may also help to establish a pattern of bilateral relations that decreases the likelihood of accidental conflict particularly military conflict while simultaneously enhancing the possibilities for future collaboration. However, the reality on all three sides make stability appear like a far-off dream. Beijing has made it obvious that it feels its national might is quickly expanding and that it will soon be enough to exercise diplomatic, economic, and military supremacy, at least in the western Pacific. Furthermore, the realities of Beijing’s expanding power have allowed it to engage in resentment diplomacy, accusing the US and other foreign powers of being responsible for China’s “Century of Humiliation” and demanding retribution. If strategic stability is to be achieved, it must begin here for the US to change its policies toward Taiwan and China, they must opt.

Conclusion

Both militaries have increased their capabilities in order to dissuade and defeat the other. The two countries have moved from rivalry to conflict, and both have made establishing Taiwan’s future the focal point of that clash on numerous occasions. Taiwan, whether you call it a pawn or not, is caught in the crossfire. As a result, lowering tensions over Taiwan might be the first step toward avoiding potentially devastating instability and, possibly, developing a cautious trust on both sides that other lingering problems can be resolved successfully. A reinforced US policy of dual deterrence, coupled with authoritative assurance, can be a first step toward restoring trust in enormous strategic stability between these two superpowers.

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Fujian Aircraft Carrier Owes Its Existence to the BRI

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With China officially launching its aircraft carrier Fujian, questions have arisen concerning such a development. Here, we have answered some questions on different levels according to the timeline, so as to present a clearer picture of the situation, showing the close relations between China’s economy and the country’s national defense.

As things stand, the vessel, referred to as a Type 003 carrier, owes its existence to China’s Belt and Road Initiative (BRI) and the “golden decade” in its economic development.

The emergence of the BRI requires China to defend its maritime routes. In the hypothetical scenario where the BRI does not exist, China’s geopolitical interest would not have expanded to the extent that a blue-water navy is necessary. Ukraine for instance has no navy at all, yet it still can control the Black Sea with shore-based “Harpoon” missiles. Therefore, without global interests, there would be no aircraft carrier today.

It should be remembered that not only the construction, but also the maintenance of aircraft carriers would require financial resources, and such resources were obtained through China’s economic development. In Russia’s case, after the disintegration of the Soviet Union and the collapse of Russia’s economy, its aircraft carrier fleet had to be disbanded, and this is a good example of the relations between the national defense with the economy. It is precisely because of the “Golden Decade” of China’s economy that laid the foundation for the country to establish its blue-water navy today.

The next question is, why did China launch the BRI? How did such an initiative come into being?

With China emerging as the major manufacturer for the rest of the world, conflicts follow suit. Furthermore, overcapacity eventually kept the price down, then came the overstocked inventory and debts. In resolving such issues, I had thought of the principle of the Marshall Plan, and this formed the predecessor and foundation of the BRI. Any detailed discussion on this topic would be long and arduous, yet in essence, the focus is on transferring production capacity, increasing investment in the world, transferring capital, and so on. These are all, in fact, related to resolving China’s own problems, that is to maintain its stable development.

This suggestion has attracted the attention of the Chinese leadership, and related policies were eventually introduced. After such a formation process, the policy was finally implemented as the BRI. It is now harder for the public to find books and narratives about the formation process of the BRI. The reason is that most did not go through such a process at all, and many only participated in it later. This, of course, does not mean that the policy formation process did not exist. After all, there is cause and effect for everything. As for the subsequent implementation results of the grand plan of the BRI, how a large number of projects went out of control is a different story, with its own causes and consequences.

The final question is, why did the “golden decade” come into play in China?

The BRI has created numerous demands, as was originally intended. In those years, not only did Chinese enterprises become larger and more prominent, but the annual growth rate of the government’s fiscal year also far exceeded the growth rate of GDP. It was such an accumulation of financial resources that supported the construction and development of aircraft carriers and other grand projects.

It is common knowledge that China’s economy entered a high growth stage after the year 2000. The annual economic growth rate was more than 10%, i.e., at a double-digit growth stage. Even when faced with the Wall Street financial crisis in 2008, China reacted by issuing an RMB 4 trillion economic stimulus package and the crisis did not impact the country much. The downturn in China’s economy was something that happened after 2012, and there are hard data that can prove this.

The so-called “golden decade” refers to an approximate time period where the main growth drivers are as follows: 1. The presence of a large amount of foreign investment and the continuous investment of foreign companies in China, making the country the world’s factory during that time. 2. China’s large number of net exports supported its economic growth. 3. Urbanization drove the development of the real estate sector, which in turn pushed the Chinese consumption and supported the economic growth. 4. China’s currency issuance, as well as investment, had driven its economic development. As it is well-known, the country’s economic growth is investment-driven. These factors worked together to form China’s “golden decade” and promote the rise of its economy into a salient global force.

The financial resources generated enabled the country to undertake various projects, including constructing aircraft carriers. Some of these projects were unimaginable in the past, yet China managed to accomplish them, such as high-speed rail networks, manned spaceflight, and so on. However, all these needed both demand and money. Of course, demand and money do not exist out of thin air, and there are driving factors behind them.

As an independent think tank, ANBOUND has the honor of participating in these great processes to a certain extent at a fundamental level through the construction of public policies, as well as in policy formation. Here, we briefly introduce some of the logical relationships and basic principles.

Looking into the future, China will face continuous challenges. From the point of view of naval projects such as aircraft carriers, as an important military asset in the future, their very existence will require more financial resources. To sustain them, China will either need to continue gaining money or it will need to tighten its belt. These are the only two options left for China.

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