After about three months of riots, often particularly violent and destructive, on October 23, 2019 the Chief Executive of Hong Kong, Carrie Lam, aliasChen Yuet-Ngor, withdrew the bill on mandatory extradition to China, which had sparked protests in the former British colony.
Never evaluate a mass protest on the basis of the reason triggering it, which can often be irrelevant.
The extradition bill, announced in September, was withdrawn a few days after the resumption of works in Hong Kong’s Parliament.
With a view to partially repressing the insurgency, the now former Chief Executive of the city-state resorted to emergency legislation, by mainly using the colonial law of 1922, which prohibits the use of masks and disguises during public demonstrations.
The protesters were and still are approximately one million, out of about eight million inhabitants.
The subsequent riots, designed to last well beyond the bill withdrawal, strained the always tense relations between the former British colony and China, with the result of throwing into crisis also the Chinese governance of the city-State and, in particular, the traditional Chinese model of “One Nation, Two Systems”.
If this model fails, the formula devised by Deng Xiaoping will not even apply to Taiwan, or possibly to the North Pacific islands, and it will anyway undermine the current Chinese idea of peaceful expansion and win-win collaboration between the Chinese motherland and all the bordering areas both in the Pacific and in Central Asia.
Since 1977 – when the Fragrant Harbour came under Chinese control – all riots in Hong Kong have been triggered by strong dissatisfaction with the Chinese motherland.
The deep economic and social dissatisfaction has always been targeted against China and never towards local power elites. In psychoanalysis, this phenomenon is called transference.
In 2003 many thousands of people living in the former British colony had protested against a law that, in their opinion, would make it difficult to express opinions and feelings defined as “anti-Chinese” and the law was postponed indefinitely.
Further riots broke out in 2012, when a clearly pro-Chinese school program was proposed and once again the local authorities (upon direct instructions from the national government) avoided implementing that law.
In 2014, there were the sit-in street protests of the Occupy Central movement, the so-called “Umbrella Revolution”, which lasted three months to ask – this time unsuccessfully – for the Chief Executive of Hong Kong to be elected by universal suffrage.
Currently, however, the real reason underlying the protests in Hong Kong is not so much the request for implementing – in the former British colony – democratic mechanisms typical of the Western culture, but rather the tension resulting from great economic inequalities.
Not to mention the broken social elevator, which is probably the real trigger of the youth rebellion in the Fragrant Harbour.
People, especially the skilled workers, cannot be ensured acceptable wages and salaries. This is the reason why many inhabitants of the old city-state migrate to Canada or Taiwan. Another blow to China.
Young graduates’ wages and salaries have dropped by at least 10% compared to 25 years ago. There is a very severe housing crisis, but anyway the choice to create a local oligarchy that tries to convince the other inhabitants is an old British idea.
In Hong Kong an oligarchy of very few families dominates the local economic system, which is worth a GDP of 343.5 billion US dollars.
The five most powerful families are still those led by Li Ka-shing, Kwong Siu-hing, Lee Shau-kee, Henry Cheng and Joseph Lau.
These five families alone control 70% of the entire Hong Kong market, including real estate and telecommunications, as well as TV channels.
The 21 leading families in Hong Kong control a wealth equal to 1,893 billion US dollars.
Obviously in China no family controls such a huge amount of wealth. In the People’s Republic of China the five major real estate operators put together control only 9% of the entire Chinese construction market.
China, however, has tried to gain support in Hong Kong, especially among entrepreneurs, with the Greater Bay Area plan, i.e. the new megalopolis on the Pearl River Delta between Hong Kong, Guangdong and Macao.
This is, in fact, Hong Kong’s infrastructure aggregation to the Autonomous Economic Zone of the Pearl River Delta, between Guangzou, Shenzhen, Zhuhai, Foshan, Zhongshan amd Jiangmen, which are the most dynamic economic areas in China.
Taxes are very low in Hong Kong, as in all business-friendly countries but, coincidentally, there is no inheritance tax.
The administrative machinery is therefore very simple: Hong Kong’sgovernment does not gain sufficient revenue from taxation and hence has no funds to invest in schools, hospitals and infrastructure.
A city like Hong Kong, with over seven million inhabitants, provides for a statutory minimum wage of 4.82 US dollars per hour. Almost all flats are illegal and, considering the cost of rents and properties, they are so small that they are about half of the “tiny apartments” in large U.S. cities, which are already very small.
The average size of Hong Kong flats per inhabitant is 16 square metres, while in Shanghai the average size per inhabitant is 36 square metres.
45% of Hong Kong’s inhabitants live in state-owned or subsidised apartments, while 90% of the Chinese people own at least their own houses.
Hong Kong’s tax reserves are at least 147 billion US dollars, but the local political system is too fragmented – even from the viewpoint of the complex electoral system – to mediate between different interests and to really solve the main problems of the city-state, namely housing, health and education costs.
Those who are ill must wait an average of 150 weeks before being examined, with 43 public hospitals that, however, employ 40% of the doctors available, since the private sector attracts many of the best professionals.
The solution of employing doctors from abroad is not very practicable, considering the low attractiveness of Hong Kong’s wages and salaries and the poor quality of health facilities.
One in six people living in Hong Kong suffers from mental disorders due to social, economic and health conditions.
The graduates’ average wages and salaries in the former British colony have fallen by over 10% compared to a decade ago. Nowadays graduates are easily paid the best salaries and wages of workers without university qualifications.
As already said, there is no social elevator.
The cost per square metre is much higher in Hong Kong than the average price in a central neighbourhood of New York.
As happens also in the West, the career prospects of young graduates in Hong Kong are very limited. They never have a house of their own and their prospects are much worse than those of their colleagues who lived in Hong Kong a few decades ago.
In Hong Kong the Gini Index, which is used as a gauge of economic inequality, is 5+, one of the highest and most unequal indexes in the world.
This is the real political core of the issue: for those who protested in Hong Kong – as currently happens everywhere in the world – “democracy” in the Euro-American sense means above all greater social equality, many opportunities and efficient public services.
This is obviously not true, but it is the model that took to the streets the crowds of the Arab Spring, the Euromaidan citizens in Ukraine and the “colourful” rebellions in Georgia.
Paradoxically, just when Western democracies are turned into States based on unearned income and the extent and quality of their Welfare diminish, they are mythicized as efficient and open.
In this case, Vilfredo Pareto would have spoken of “residues”, i.e. memories of a time that no longer exists, but that are still in action in the crowds’ deep psyche.
In 1997, at the time of unification based on the “One Country, Two Systems” model, Hong Kong’s GDP accounted for 18% of whole China’s GDP.
Currently, after China’s fast growth, the importance of the Fragrant Harbour is the same as the relevance of Guangdong or Shenzhen.
The current protests, however, have also put Hong Kong’s business community in severe difficulty.
The majority of Hong Kong’s leading companies do most of their business with China. It is not by chance that last August the Chinese authorities gathered 500 of the most important businessmen and political leaders in Shenzen to support the Hong Kong government and, possibly, sufficiently improve the social situation of the city-state, which, however, remains explosive.
Hong Kong’s financial market has suffered the greatest damage.
The Chinese company Alibaba has postponed its listing on the local Stock Exchange until the uprising has finally abated, while Fitch has lowered Hong Kong’s rating.
Pending a systemic integration with the regulatory network of mainland China.
Another problem that the riots in the Flagrant Harbour may cause is migration.
Last year 24,300 highly-skilled young people left the country and the rate of migration requests has risen by 15% per year.
Where do they go? To Canada, Australia, New Zealand and Taiwan.
On the other hand, the number of Chinese people migrating to Hong Kong has decreased by 14,000 per year.
Furthermore, this November there will be the Hong Kong District Council elections and it is very likely that youth discontent will find a way to assert itself in the polls.
A fragmented society under crisis creates many problems for those planning business cycles and Hong Kong is likely to see its growth rate decrease by at least 3%.
Where will capital go? Obviously in the Chinese area bordering on Hong Kong, with an expected investment growth of almost 6.5%, largely consisting of capital outflows from Hong Kong.
The differences between Hong Kong and China, however, are much wider than those shown with violence during the recent long protests, which often followed the same tactics of the color revolutions organized by the US Services, according to the old model developed by the Einstein Institute.
For China, Deng Xiaoping’s criterion “One Country, Two Systems” means that China takes over Hong Kong despite the differences in political and economic systems, which will eventually tend to overlap. Conversely, for Hong Kong leaders the “Country” is just lip service paid in view of maintaining the separation from China, both from a cultural as well as an economic and political viewpoint.
China has so far controlled Hong Kong with the same logic with which it has supervised its “dangerous” territories, namely Tibet, Xinjiang and Manchuria.
The current Chinese centralization stems from the analysis of the inglorious collapse of the almost federalist Soviet Union. In this regard, suffice to recall the ironic smiles that welcomed Gorbachev on his visit to China, just when the Tiananmen Square protests had reached their climax.
It does not matter that the right to secession was established in Lenin’s Sacred Texts. The fact is that, for the Chinese leadership, the unity of the Country and the repression of every regionalist secession is fundamental to the permanence of the State – and of the Party.
China, however, still depends on the financial hub of Hong Kong, the only one completely open to the world capital flows.
According to 2018 data, the Hong Kong Stock Exchange capitalizes 29.9 trillion local dollars.
Shenzhen and Shanghai cannot replace Hong Kong in this respect.
Therefore, China could not intervene in Hong Kong because otherwise it would have destroyed on its own the way connecting China to international capital flows.
Furthermore, the repression of the Hong Kong movements would have destroyed the model “One Country, Two Systems”, which is exactly the one that will be applied to Taiwan, at the right time.
Nor should we forget that, pending the New Silk Road promoted by China, the Western Powers are conceiving political mechanisms for disrupting and possibly stopping the “Road”, by organizing rebellions and anti-Chinese parties and movements in the various countries where the passage of the Chinese One Belt One Road (OBOR) is planned.
Obviously China does not stand by and wait to see.
From this viewpoint, the Hong Kong uprising is a model that will soon be imitated and that China will oppose exactly with the same political tactics.
As is recommended in the Thirty-Six Stratagems, “Befriend a distant State and strikes a neighbouring one”.
The Taliban seek cooperation with China?
How to deal with Afghanistan after the removal of US forces has become a subject that many countries are grappling with. And because Afghanistan and China are linked through Xinjiang, the Afghan Taliban aspire to cooperate with China. According to sources, on July 28, Baradar, the head of the Taliban’s Political Committee, visited China and met with Foreign Minister Wang Yi.
During the meetings, Foreign Minister Wang Yi made a personal plea to the Taliban in Afghanistan, expecting that the Taliban would draw a line with terrorist organizations like the East Iraqi Movement and actively battle them, removing barriers to regional growth and cooperation. Since the United States made it apparent that it intends to withdraw its troops, China’s position toward Afghanistan and the Taliban has become the center of all countries’ attention.
Prior to that, China simply repeated its long-standing foreign policy of non-interference in domestic matters, — in other words, China does not intervene in Afghanistan’s internal problems and expects Afghans to handle their own internal affairs. China, on the other hand, is very concerned about the situation in Afghanistan. China has not only made substantial investments in Afghanistan, but it has also sponsored several dialogues in China between Afghan parties.
Only because of the complexities of the situation in Afghanistan does China lack a clear answer. China has stated its particular needs more explicitly this time than in the past. China has far too many considerations when it comes to Afghanistan. However, in comparison to the behavior of many other nations, China’s demands for the Taliban this time have been well thought out, fair, and controlled.
First, China has maintained its previous favorable policy. Despite the fact that the Afghanistan problem is unique, China has not broken its foreign policy of non-interference in internal matters. On the basis of this strategy, China has had interactions with all parties in Afghanistan, ensuring that participation is not only voluntary, but also sufficient to ensure that all parties understand China’s position in order to avoid misunderstandings.
Second, China has stated its opinion on the subjects that most worry it. China has no space for compromise when it comes to national security. China has not raised this matter in the past, but it still needs to voice its viewpoint at the proper moment. As a result, China has the guts to demonstrate its stance, which will aid in the resolution of the situation.
Only when this issue is settled will future collaboration between China and Afghanistan be simple. The Taliban further said that no troops will be allowed to utilize Afghan territory to conduct activities that harm China. Atta regards China as a reliable ally and thinks that China would contribute to peaceful rebuilding.
Furthermore, China has not permitted certain ill-intentioned groups throughout the world to flourish. Following the withdrawal of the US troops, there was speculation in Western culture that China might become engaged in this issue and become the next growing power to enter the “empire’s tomb.” The Indian army’s recent intervention in Afghan politics appears to demonstrate that, as a powerful country around Afghanistan, it is hard to stay out of the issue.
China avoided the urge to intervene and managed its interactions with all sides sensibly, laying the ground for the next phase in the development of China-Afghan relations. So far, China has not fallen into the West’s trap, nor has the deterioration of the situation in Afghanistan harmed its relations with all parties.
As China expands its global presence, it will eventually come into contact with nations with very difficult political and economic situations, such as Afghanistan. However, China will not flee because of obstacles, because the majority of the world’s developed countries are Western countries with strong biases against China, and those wanting to have good relations with China are frequently developing countries with varied challenges. nation. As a result, China has no option.
Will US-China Tensions Trigger the Fourth Taiwan Strait Crisis?
Half a century ago, the then-National Security Advisor Henry Kissinger flew to Beijing in the hope of seeking China’s alliance to contain the Soviets. His visit culminated in the U.S. agreement to recognize Beijing as the only legitimate government of China instead of Taipei, going back on the promise he had made to the president of the Republic of China, Chiang Ching-kuo, merely one year previously that Taiwan would never be abandoned by the US. The realistic American diplomat may have never thought that one day Taiwan, once ruthlessly forsaken by the US, would become the latter’s most important strategic fortress in East Asia to contain a rising China.
In 2018, the passage of the Taiwan Travel Act encouraged more high-ranking American government officials to visit Taiwan and vice versa1. The US Undersecretary of State Keith Krach landed in Taiwan two years later, rendering him the highest-level State Department official to visit the island since 19792. The Secretary of State, Mike Pompeo, announced the cancellation of all restrictions on official contacts between the U.S. and Taiwan in January 20213 – an action that was vehemently denounced by the Chinese government as Trump’s “last-ditch madness” that would “push the Taiwan question deeper down the road of no return”4.
Just when the world thought of Joe Biden’s ascension to power as a harbinger of softer attitudes toward Beijing, especially regarding Taiwan issues, the diplomatic muscle flexed by the newly elected US president is as eye-tingling as his aviator shades – first, his Secretary of State, Blinken and Secretary of Defense, Austin made an explicit announcement of the U.S. support for Taiwan; second, he sent former Deputy Secretaries of State Richard Armitage and James Steinberg and former senator Chris Dodd to Taiwan in honor of the 42nd anniversary of the Taiwan Relations Act.
America’s incremental interest in the island is not confined to actions from its executive branches, but it has permeated its legislative system. The introduction of the confrontational “Strategic Competition Act of 2021” in April signals the anti-Soviet-style containment of China which was backed by The Senate Foreign Relations Committee. This bill echoes the “Interim National Security Strategic Guidance” released by the Biden Administration in March, and it emphasizes the urgent need to “achieve United States political objectives in the Indo-Pacific” and back closer ties with Taiwan5. With strong bipartisan support, the bill is expected to be signed into law by President Biden and to serve as a legislative compass to counter China at all levels. In that respect, Taiwan Strait is more likely than ever to become “ground zero” by the U.S. and China.
On the other hand, the crackdown on Hong Kong’s democracy movement under the new National Security Law by Beijing proved to be successful due to the limited backlash received from the West. On top of that, Beijing’s handling of Xinjiang cotton issue seems to have managed to incite nationalism among Chinese people on a short notice to boycott “anti-China forces”6. With a record of 380 incursions into Taiwan’s airspace by Chinese air force during 2020, there is reason to believe that Hong Kong and Xinjiang were “guinea pigs” used by Beijing to test its capability for the fourth Taiwan Strait Crisis, the probability of which has been enhanced by Xi Jinping’s attempt to seek reappointment and Beijing’s need to divert domestic attention away from the escalating social conflicts brought about by the stagnant economy.
So, the pertinent question is: if the fourth Taiwan Crisis does break out, when will it happen? It could be sometime after the 2022 Beijing Winter Olympic Games7 as it is unlikely for China to discard the opportunity to showcase its image and test its comprehensive strength8. This could be déjà vu in light of Russia’s successful Blitzkrieg-style invasion of Ukraine in 2014, which occurred only three days after the end of Sochi Winter Olympics. However, China is not the only one who can learn from history. When the rest of the world anticipates China’s intent with regard to Taiwan, preemptive precautions will be taken. The game-theory-type strategic interaction may hence spur China to launch its attack before the upcoming international sports gala.
Another critical timing could be prior to the 20th National Party Congress of the Chinese Communist Party in October 2022. Xi Jinping’s abolishment of term limits through constitutional amendment may pave the legal foundation for his reappointment, but the “widespread opposition within the party”9 renders the legitimacy of his extended tenure unlikely. That is why some may find it hard to conceive of Xi’s attempt to “start an unnecessary war with Taiwan” before his re-appointment10, but his insatiable desire for a 3rd term may push him over the edge. For the time being, Xi seems to be seduced by his burgeoning self-confidence that China is charging into an epoch of opportunity where “the East is rising and the West is declining,”11 and what time is better than now to consolidate his authority in front of dissidents with a military show-off targeting Taiwan?
As Henry Kissinger12 said, “The historical challenge for leaders is to manage the crisis while building the future. Failure could set the world on fire.” When the leaders of the two greatest powers both see their own countries as the future “Leviathan” of the world, the definition of failure can no longer be merely confined to internal mismanagement, but being surpassed by international competitors. Kissinger may have overestimated some leaders’ senses of honor to bear the responsibility of the “historical challenge”, but he can be right about the catastrophic consequences of their failures. But this time, failure is not an option for either side across the Taiwan Strait nor across the Pacific Ocean
- Chen, Y., & Cohen, J. A. (2019). China-Taiwan Relations Re-Examined: The “1992 Consensus” and Cross-Strait Agreements. University of Pennsylvania Asian Law Review, 14(1).
- Mink, M. (2021). The Catalyst for Stronger US-Taiwan Ties. https://keithkrach.com/the-catalyst-for-stronger-us-taiwan-ties/
- Hass, R. (2021). After lifting restrictions on US-Taiwan relations, what comes next? Brookings. https://www.brookings.edu/blog/order-from-chaos/2021/01/11/after-lifting-restrictions-on-us-taiwan-relations-what-comes-next/
- Global Times. (2021). Pompeo may toll the knell for Taiwan authorities. https://www.globaltimes.cn/page/202101/1212378.shtml
- Zengerle, P., & Martina, M. (2021). U.S. lawmakers intensify bipartisan efforts to counter China. Reuters. https://www.reuters.com/world/asia-pacific/us-lawmakers-look-advance-sweeping-bid-counter-china-2021-04-21/
- Cui, J., & Zhao, Y. (2021). Boycott of Xinjiang cotton use opposed. China Daily. https://www.chinadailyhk.com/article/161495
- Everington, K. (2021). Former US security advisor says Taiwan in “maximum danger” from PLA. Taiwan News. https://www.taiwannews.com.tw/en/news/4189160
- China Daily. (2021). Preparing for Winter Olympics promotes quality development – Opinio. China Daily. http://www.chinadaily.com.cn/a/202101/22/WS600a131ba31024ad0baa44f1.html
- The Guardian. (2020). China’s Xi Jinping facing widespread opposition in his own party, insider claims. https://www.theguardian.com/world/2020/aug/18/china-xi-jinping-facing-widespread-opposition-in-his-own-party-claims-insider
- Roy, D. (2021). Rumors of War in the Taiwan Strait. The Diplomat. https://thediplomat.com/2021/03/rumors-of-war-in-the-taiwan-strait/
- Buckley, C. (2021). Xi Maps Out China’s Post-Covid Ascent. The New York Times. https://www.nytimes.com/2021/03/03/world/asia/xi-china-congress.html?_ga=2.178218534.2000768907.1619749005-1359154941.1599697815
- Kissinger, H. A. (2020). The Coronavirus Pandemic Will Forever Alter the World Order. https://www.wsj.com/articles/the-coronavirus-pandemic-will-forever-alter-the-world-order-11585953005
Quad Infrastructure Diplomacy: An Attempt to Resist the Belt and Road Initiative
Over the years, the competition between the great powers in the dual space of the Indian and Pacific Oceans has been rapidly increasing. In the face of the aggravation of relations between the PRC and the United States, the defence dimension of the rivalry between the two contenders for global leadership traditionally comes to the forefront. However, in today’s context, the parties will most likely not engage in military action for the strengthening of their dominance in the region, but they will try to achieve the goals by expanding of economic influence. In this context, along with the well-known trade wars, there is an infrastructure rivalry in the region, which is enforced on Beijing by Washington and the Quadrilateral Security Dialogue (Quad).
The role of Infrastructure in Indian and Pacific Oceans’ countries
The countries of Asia traditionally drawing the attention of the world community due to the high rates of economic, technological, and social development. In less than three decades, their per capita income has increased by 74%, millions of people have been lifted out of poverty, as well as a growing middle class has emerged in the region. All this became possible due to the multilateral cooperation institutionalization and the integration of the economies of the Indo-Pacific. However, the strengthening of trade and economic ties and the future prosperity of Asia largely depends on the infrastructure (ports, highways and railways, airports, pipelines, etc.), which contributes to a more active movement of goods on a regional and global scale. Moreover, back in 2009, the Asian Development Bank (ADB) published a report according to which collective investments in infrastructure in the amount of US$8 trillion will be required to maintain rapid economic growth in Asian countries.
The most prominent infrastructure initiative in recent years is the «Belt and Road Initiative» (BRI), which was launched by China’s leader Xi Jinping in 2013. The BRI helped to fill numerous infrastructure gaps, but the United States and its partners increasingly paid attention to the geostrategic aspect of China’s actions. It’s no secret that the Belt and Road plays an important role in the development and integration of China’s provinces with neighboring countries. However, with the growing number of countries participating in the BRI, as well as the strengthening of China’s influence on a regional and global scale, criticism of the strategic tools for expanding Beijing’s economic influence gradually increased. The Belt and Road has faced a number of critical remarks, including those related to accusations of purposely involving the regional countries in the so-called «debt traps». Regardless of the degree of truthfulness or study of the issue, from year to year, media reports have contributed to the building of a contradictory attitude to China’s BRI among the residents, experts, and political elites all over the world.
Moreover, as soon as Donald Trump became the U.S. President in early 2017, Washington modified the nature of its policy towards China to greater confrontation. This trend has become a direct expression of the intensified great powers’ rivalry and their struggle for hegemony in the Indo-Pacific, as well as a motivation for the revival of the Quadrilateral Security Dialogue (Quad), which includes the United States, Australia, India and Japan. However, the interaction of the Quad has long been built on the basis of defence.
This trend continues nowadays, as evidenced by the frequent exercises and the growing Quad naval presence in the Indo-Pacific but in 2021 the Quad countries expanded their range of issues on a multilateral basis. Now the agenda includes vaccine diplomacy (providing 1 billion COVID-19 vaccines to Indo-Pacific countries, climate change, technological cooperation, maritime security, cybersecurity, and external development assistance. According to Kurt Campbell, Indo-Pacific policy coordinator at the National Security Council, Washington is looking to convene an in-person fall summit of leaders of the Quad countries with a focus on infrastructure in the face of the challenge from China.
Quadrilateral infrastructure diplomacy as the continuing vector of the Trump’s administration
The infrastructure agenda also became an important part of the last summit of the G7 countries’ leaders, during which the parties expressed their willingness to establish a BRI counterpart called Build Back Better World (B3W). In total, there are 22 mentions of infrastructure in the final G7 Summit Communiqué. Even despite the traditionally restrained position of India, which took the time to «study the specifics of the proposal», infrastructure diplomacy of Quad is becoming a new area of geostrategic competition in the Indo-Pacific.
There’s one exception: the activities on the infrastructure track are not a new trend of U.S. President Joe Biden’s administration, but a continuation of the foreign policy vector set during the presidency of Donald Trump. It was he who turned Sino-U.S. rivalry into a geo-economic level. Back in 2017, the Foreign Ministers of the Quad countries stated the need for high-quality infrastructure development in order to ensure freedom and openness of sea routes, as well as improve intra-regional ties. In 2018, MoU was signed between the US Overseas Private Investment Corporation (OPIC), the Japan Bank for International Cooperation (JBIC) and the Ministry of Foreign Affairs and Trade of Australia, aimed at implementing major infrastructure projects in the Indo-Pacific. Moreover, the Quad countries raised the question of the BRI countries’ growing debt during their official meeting in Singapore.
It was clear that the Belt and Road Initiative is perceived by the Quad countries as the main factor in expanding the economic and political influence of the People’s Republic of China, as well as China’s influence of the domestic political processes in the countries of Indo-Pacific. At the same time, the combination of economic and defence rivalry enforced on Beijing by Washington, as well as Quad’s efforts to build a balance of power in the region actually indicates the explicit anti-China nature of the Quad.
In this case, it’s important to note that each of the Quad countries has its own levers of influence, which they can combine in infrastructure competition with Beijing. For example, in 2015, in response to the implementation of the Belt and Road Initiative and the establishment of the Asian Infrastructure Investment Bank (AIIB) by China, Japan made the Partnership for Quality Infrastructure (PQI). The United States, in turn, announced the infrastructure project Blue Dot Network (BDN), as well as the Ministry of Foreign Affairs and Trade of Australia established a new Partnerships for Infrastructure (P4I). All these initiatives are united by a commitment to inclusive economic growth, «quality infrastructure», climate change, disaster response, and social development. The capitalization of the Japanese, American and Australian initiatives is US $110 billion (US$50 billion from Japan and over US$50 from the Asian Development Bank), US$30-60 million, and US$383 thousand (including access to US$4 billion of foreign aid and $US2 billion from the Australian Infrastructure Financing Facility for the Pacific), respectively. Given the ongoing discussions about debt traps, the emphasis on «high-quality infrastructure» may give special features to the initiatives of the Quad but even the total amount of funding will not be able to compete with the US$770 billion investments already made in 138 countries of the world and announced by China.
Anyway, Quad is stepping up its infrastructure diplomacy in at least three areas, including Southeast Asia, Oceania, and the Indian Ocean. For example, Australia, Germany and Switzerland have already allocated US$13 million to the Mekong River Commission For Sustainable Development (MRC) to assist Cambodia, Laos, Thailand and, Vietnam «to respond to pressing challenges while safeguarding the ecological function of the Mekong River and improving people’s livelihoods».At the same time, Australia signed US$300 million MoU with Papua New Guinea, aimed at the ports reconstruction in the major state of Oceania (the ports of Vanimo, Kimbe, Motukea, Lorengau, Oro Bay, Daru, Lae, etc.). It is important to highlight that the increasing economic and infrastructural presence of China in the countries of Oceania, energize Australia’s policy in the South Pacific, which is a traditional zone of influence of Canberra. At the same time, the expansion of Australia’s aid and investment to the broader Indo-Pacific is due to the commitment of the current Australian government to the U.S. foreign policy.
In turn, the reaction of the Southeast Asian countries to the intensification of Quad infrastructure diplomacy will be more restrained. According to the latest Pew Research Center survey, the most unfavourable view of China is in the United States (76%), Canada (73%), Germany (71%), Japan (88%), Australia (78%), and South Korea (77%), while in Singapore — the only country representing ASEAN in the survey — the percentage of unfavourable views on China is at a low level (34%). Moreover, considering the aspects of infrastructure diplomacy in the region, we should definitely refer to the survey of the Center for Strategic and International Studies (CSIS) of the political elites of the region «Powers, Norms, and Institutions: The Future of the Indo-Pacific from a Southeast Asia Perspective», published in 2020. Despite the intentional exclusion of Russia from the survey, it approximately reflects the trends in the Indo-Pacific countries at the present stage. Thus, as a result of the survey, American experts revealed that the political elites of Southeast Asia positively assess China’s activities in the field of infrastructure development, which has brought tangible benefits to most Southeast Asian countries.
China is actively reacting to verbal attacks from the United States and Quad. The infrastructure agenda was no exception, but China responded by modernizing its global Belt and Road Initiative. In response to criticism about the involvement of the countries in debt traps, Beijing has developed a new Foreign Policy White Paper «China’s International Development Cooperation in the New Era». The document was published in early 2021. According to the provisions of the new White Paper, China will pay closer attention to the process of implementing projects within the aid framework, take an active part in evaluating projects in order to monitor their quality, maintain an appropriate level of confidence in its projects to China, as well as conduct bilateral consultations to identify difficulties with debt repayment and make sure that partners do not fall into a debt trap. It’s possible that the new vision of the PRC will appear especially quickly in countries where the Quad will primarily try to implement their infrastructure projects.
China is the first country in the region, which pays significant attention to the issues of large-scale infrastructure development. Moreover, Beijing has a number of advantages over its opponent — Quad. First, the Belt and Road initiative is more structured and aimed at intensifying trade, economic, cultural and humanitarian cooperation with neighboring countries, while the emerging Quad infrastructure agenda is «dispersed» among numerous individual initiatives, doesn’t have the same level of stability as the BRI, and even after 3.5 years of building the agenda is considered through the prism of expectations.
Second, China’s initiative is aimed at a single infrastructure connection between the PRC and the rest of the world and acts as a potential basis for the intensification of global trade in the future. At the same time, today’s projects of the Quad are of a “sporadic» nature and can’t contribute to the infrastructure linkage between Europe, Africa, South and Southeast Asia on a global scale.
Third, China can already offer the Belt and Road members not only logistics infrastructure but also the opportunities in the field of green energy. At the end of 2019, China produced about a third of the world’s solar energy and retained a leading position in the number of wind turbines. Within the foreseeable future, the Quad countries, and especially the United States, will have to compete with China even in the field of the climate agenda, which is so close to the new administration of the U.S. President Joe Biden.
Finally, during his recent speech on the occasion of the 100th anniversary of the Chinese Communist Party (CCP), PRC’s Leader Xi Jinping confidently declared the great revival of the Chinese nation, its contribution to the progress of human civilization, and its readiness to build a new world, which undoubtedly indicates China’s decisiveness to respond to challenges to its address, including from the Quad.
The ongoing transformation of the regional architecture in the Indo-Pacific, both in the defence and economic areas, will be an important aspect in the post-pandemic era. China has repeatedly stated about the «covered» Quad activities to deterrence Chinese policy in the region, but the expansion of the Quad’s agenda by infrastructure diplomacy allows us to speak about the evident vector of the Quad strategy against the PRC.
However, nowadays the Quad countries had been left behind. China already has the world’s most numerous land forces, the largest navy, as well as an ambitious global Belt and Road initiative that includes almost 140 countries and a capitalization approaching US$1 trillion. Of course, Quad is moving towards the institutionalization of its infrastructure cooperation and the potential expansion of the number of participating countries to the Quad Plus format. However, to reach China’s achievements for the period 2013-2021, the new alliance will need at least a decade.
At the same time, the rivalry of the Belt and Road with the Quad’s infrastructure initiative will help the countries of the region to diversify their infrastructure ties but will make their choice even more difficult, since it will primarily be regarded as support for the foreign policy vision of one of the parties, and not a pragmatic estimate of economic benefits. All this makes the regional environment in the Indo-Pacific increasingly complex and forces middle powers and smaller countries to adapt to new geostrategic realities.
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