China’s new footprint in the Middle East starts with Iran

Introduction

Iranian Foreign Minister Hossein Amir Abdollahian met with Chinese Foreign Minister Wang Yi on Friday, January 14, 2022, in the city of Wuxi, in China’s Jiangsu province. Both of them discussed a gamut of issues pertaining to the Iran-China relationship, as well as the security situation in the Middle East.

A summary of the meeting, published by the Chinese Foreign Ministry, underscored the point that the Foreign Ministers of Iran and China agreed on the need for strengthening bilateral cooperation in a number of areas under the umbrella of a 25-year agreement known as “Comprehensive Cooperation between the Islamic Republic of Iran and the People’s Republic of China.” This agreement had been signed between both countries in March 2021 during the Presidency of Hassan Rouhani, but the Iranian Foreign Minister of the new Raisi government announced the launch of the agreement on January 14, 2022.

During the meeting there was a realization of the fact that cooperation between both countries needed to be enhanced not only in areas like energy and infrastructure (the focus of the 25-year “comprehensive cooperation agreement” was on infrastructure and energy), but also in other spheres like education, people-to-people contacts, medicine, and agriculture. Iran also praised the Belt and Road Initiative (BRI) and said that it firmly supported the One China policy.

China-US and the Iran nuclear deal

The timing of this visit is interesting, as Iran is in talks with other signatories to the JCPOA/Iran nuclear deal 2015 (which includes China) for the revival of the 2015 agreement. While Iran has asked for removal of economic sanctions which were imposed by the US after it withdrew from the JCPOA in 2018, the US has said that time is running out, and it is important for Iran to return to full compliance to the 2015 agreement. US Secretary of State Antony Blinken said in an interview: “Iran is getting closer and closer to the point where they could produce on very, very short order enough fissile material for a nuclear weapon.” The US Secretary of State also indicated that if the negotiations were not successful the US would explore other options along with other allies.

During the course of the January 14 meeting Wang Yi is supposed to have told his Iranian counterpart that while China supported negotiations for the revival of the Iran nuclear deal 2015, the onus for revival was on the US since it had withdrawn in 2018.

The visit of the Iranian Foreign Minister to China was also significant because Foreign Ministers of four Gulf Cooperation Council (GCC) countries – Saudi Arabia, Kuwait, Oman, and Bahrain — and the Secretary General of the GCC (Nayef Falah Mubarak Al-Hajraf) were in China from January 10-14, 2022, with the aim of expanding bilateral ties – especially with regard to energy cooperation and trade. According to many analysts, the visit of GCC officials to China was driven not just by economic factors, but also the growing proximity between Iran and Beijing.

In conclusion, China is important for Iran from an economic perspective. Iran has repeatedly stated that if the United States does not remove the economic sanctions it has imposed, it will focus on strengthening economic links with China (significantly, China has been purchasing oil from Iran over the past three years in spite of the sanctions imposed by the US). The Raisi administration has repeatedly referred to an ‘Asia-centric’ policy which prioritises ties with China.

Beijing is seeking to enhance its clout in the Middle East as US ties with certain members of the GCC, especially the UAE and Saudi Arabia, have witnessed a clear downward spiral in recent months (the US has been uncomfortable with the use of China’s 5G technology by the UAE and the growing security linkages between Beijing and Saudi Arabia). One of the major economic reasons for the GCC gravitating towards China is Washington’s thrust on reducing its dependence upon GCC for fulfilling its oil needs. Beijing can utilize its good ties with Iran and the GCC and play a role in improving links between both.

The geopolitical landscape of the Middle East is likely to become more complex, and while there is not an iota of doubt that American influence in the Middle East is likely to remain intact, China is fast catching up.

China, Covid, and economic slowdowns

China’s economy faces a number of challenges — three in particular:

  1. the spread of the covid19 pandemic
  2. the country’s ambitious zero-covid approach (which has resulted in severe lockdowns)
  3. and a grave real estate crisis arising out of the crackdown on the property market

The slow down of China’s economy was acknowledged by Chinese Premier Li Keqiang. In a meeting he is reported to have said: “It is necessary … to further cut taxes and [administrative] fees to ensure a stable economic start in the first quarter and stabilize the macro economy.”

During a meeting in December 2021, Chinese leadership flagged ‘stability’ as its key aim for 2022. This was in stark contrast to targets for 2021, which was focused on ‘the disorderly expansion of capital’ driven by President Xi Jinping’s objective of reducing inequalities in Chinese society.

China’s zero-covid strategy is impacting its economic links with the rest of the world as international air travel is restricted, and even the stringent lockdowns applied in the country are likely to take their toll on global supply chains. A lockdown in Xian, for instance, has already prompted Samsung Electronics and Micron Technology, two of the world’s largest memory chip makers, to red flag the possibility of their chip manufacturing bases in the area being hit.

As a result of its zero-covid strategy, and its aim of controlling the spread of the pandemic in Xian, and also before the Beijing winter Olympics next month, China has further tightened regulations for the import of products from neighbouring countries in Southeast Asia. Trucks with agricultural products from Vietnam and Myanmar have been stranded for weeks (some for well over a month), and as a result products have been rotting (especially fruits like mangoes and jackfruit) and exporters in both countries have had to face losses (exports of non-agricultural products, such as rubber and minerals, from Laos to China, have also suffered). Apart from stringent checks, exporters of commodities are supposed to carry Chinese trucks across the border – the unloading of goods and transfer is a time consuming process and this leads to further delays.

It is not just mainland China but also the important financial hub of Hong Kong that has been following a zero-covid policy, which has impacted its economy – especially the tourist sector. The fact that Hong Kong will be opening to China before it opens to the rest of the world has also not sent out a positive message to international businesses.

China faces the onerous responsibility of not just keeping covid19 under check, but also preventing a further slow down in its economy. Economic challenges and the zero-covid approach will lead not only to domestic problems, but also impact its economic linkages with the rest of the world, especially neighbouring countries in Southeast Asia (China is an important market for agricultural products of Vietnam and Myanmar). The slow down in China’s economy and the remarks by Li Keqiang with regard to the same also highlight the limitations of Xi Jinping’s economic vision and the fact that there is a growing concern with regard to the country’s possible economic challenges over the next few months.

China’s new footprint in the post-American Middle East

Days after the UAE’s decision to cancel the agreement regarding purchase of F35 jets from the US, a CNN report (December 23, 2021) stated that assessments of senior US officials suggested that transfers of sensitive ballistic missiles had taken place between China and Saudi Arabia.

UAE’s reasons for cancelling the agreement for purchase of F35s

One of the reasons for the UAE to cancel the deal with the US was that it did not want to be caught in any sort of ‘cold war’ between both the US and China. Anwar Gargash, Diplomatic Adviser to the UAE’s leadership, said, while speaking at a think tank in Washington DC earlier this month:

I think we, as a small state, will be affected negatively by this, but will not have the ability in any way to affect this competition even positively really.

While the US has been uncomfortable with the UAE’s use of Chinese 5G technology, with Washington warning the Emirates that the latter’s use of technology will impact security ties between both countries, the findings of US surveillance that China was trying to build a military installation in Khalifa port, close to Abu Dhabi, led to serious differences. Although construction work on the site in Khalifa port was cancelled (though both the UAE and China insisted that the facility was purely commercial in nature), and both the Emirates and the Americans have publicly stated that their relationship is still strong, there is no doubt that recent events have cast a shadow on the bilateral relationship.

If one were to look at the case of Saudi Arabia developing ballistic missiles, it is important for a number of reasons. First, it shows the increasing security imprint of China on the Middle East, specifically two Gulf Cooperation Council (GCC) countries: Saudi Arabia and the United Arab Emirates (UAE). Both are considered to be close to the US, and the fact is that ties with China could emerge as a bone of contention in relations between Washington and Abu Dhabi and Riyadh.

A senior Chinese official did not deny cooperation in the sphere of ballistic technology between Saudi Arabia and China, stating that both countries are comprehensive strategic partners. Said the official:

Such cooperation does not violate any international law and does not involve the proliferation of weapons of mass destruction.

Interestingly, China also shares robust economic ties with Iran and has been pitching for revival of the 2015 Joint Comprehensive Plan of Action JCPOA/Iran nuclear deal, while the UAE and Saudi Arabia, like the US, Israel, and other countries, have expressed worries with regard to Iran’s nuclear ambitions. China and Iran have also signed a 25-year cooperation agreement, referred to as “strategic cooperation pact,” in March 2021, which sought to bolster economic and security linkages between both countries. Iran has also hinted that if the JCPOA does not revive it would go ahead and trade with China and other countries.

Second, the development of ballistic missiles by Saudi Arabia will have a significant impact on the Middle East, and make it tougher for the US and other countries to prevent Iran from developing a ballistic program.

US ties with Saudi Arabia

While information pertaining to Chinese assistance for Saudi development of ballistic missiles was available to the US even earlier, the Trump administration did not put much pressure on the Saudis over this issue. The Biden Administration’s ties with Riyadh have been strained (as a result Saudi Arabia has been attempting to reorient its foreign policy significantly), though in recent months the US has been working on remolding ties. One of the reasons why Washington did not impose sanctions on Saudi Crown Prince Mohammed Bin Salman (MBS) even though declassified reports of CIA pointed to the fact that MBS was clearly involved in the Jamal Khashoggi murder (a number of Saudi officials were put on a no travel list, while financial sanctions were imposed on some officials), was that the US did not want to allow ties with Saudi Arabia to further deteriorate.

GCC countries like Saudi Arabia and the UAE, which have shared strong economic and strategic ties with the US, have been altering their foreign policy within the Middle East (one important example of this has been attempts by both countries to improve ties with Iran) as well as outside of it. One of the propelling factors for the reorientation in foreign policy of Riyadh and Abu Dhabi is the belief that the US will be less involved in the region in the future. In the past the China factor has never been a major issue in US ties with Saudi Arabia and the Emirates, but greater security and technological cooperation between the GCC states and Beijing could prove to be a thorny issue. Apart from its increasing economic clout, the biggest advantage that China possesses in the Middle East is that, apart from strong ties with Gulf countries, it also has good relations with Iran.

“Blood is Thicker Than Water: Elite Kinship Networks and State Building in Imperial China”

A long tradition in social sciences scholarship has established that kinship-based institutions undermine state building. I argue that kinship networks, when geographically dispersed, cross-cut local cleavages and align the incentives of self-interested elites in favor of building a strong state, which generates scale economies in providing protection and justice throughout a large territory. I evaluate this argument by examining elite preferences related to a state-building reform in 11th century China. I map politicians’ kinship networks using their tomb epitaphs and collect data on their political allegiances from archival materials. Statistical analysis demonstrates that a politician’s support for state building increases with the geographic size of his kinship network, controlling for a number of individual, family, and regional characteristics. My findings highlight the importance of elite social structure in facilitating state development and help understand state building in China – a useful, yet understudied, counterpoint to the Euro-centric literature.

Read the whole thing (pdf).

“Federations, coalitions, and risk diversification”

[…] while we recognize that issues of participation in a coalition involve complex factors, there has been little discussion in the literature from a risk-sharing perspective. It is well-known in financial economics that the pooling of resources and the spreading of risk allows investors to realize a rate of return that approaches the expected rate. We take this to be a natural motive for federation formation among a group of regions. Indeed, the existence of an ancient state in China (the example given in the next section) supports our intuition. It appears that floods, droughts and the ability of a centralized authority to diversify risk paved the way for the unification of China as early as 2000 years ago. Thus, our approach is not empirically irrelevant.

Click the “pdf” tab on the right-hand side, not the “buy PDF” tab.

Some Monday Links

It’s Not in Your Head: The World Really Is Getting Worse (The Walrus)

How China Avoided Soviet-Style Collapse (Noēma)

The Role of “We” Versus the Role of “I” (Econlib)

Party-crashing was a serious business in medieval Arabic tales (Psyche)

Nightcap

  1. How to leave philosophy Greg Stoutenburg, Philosopher’s Cocoon
  2. Will bourgeoisie ever rule the Chinese state? Branko Milanovic, Global Inequality 3.0
  3. Adam Smith’s three theories of the British Empire Barry Weingast, SSRN
  4. Desert and self-defense Irfan Khawaja, Policy of Truth

Nightcap

  1. Afghanistan is where ideologies go to die Sumantra Maitra, Critic
  2. Twilight of the Satyrs Charlotte Allen, Quillette
  3. The Chinese mirror Pierre Lemieux, EconLog
  4. The Tang dynasty died in Afghanistan, too Chan Kung, Diplomat

China and the Taliban

Introduction

Chinese Foreign Minister Wang Yi met with a nine-member delegation of the Taliban on July 28, 2021. The delegation was led by Abdul Ghani Baradar, who heads the Taliban’s political office in Doha. In July 2021, the Taliban had visited Russia and the Kremlin envoy for Afghanistan, Zamir Kabulov, had met with the delegation. Kabulov said that the Taliban had assured him that the territory of Afghanistan will not be used against Russia or any of its allies in Central Asia.

The meeting between Yi and the Taliban delegation is the first high level public meeting after the Taliban has managed to gain control over a significant portion of Afghanistan’s territory, including Badakshan province, which shares a border with China’s western Xinjiang region (given the changing geopolitical dynamics, Beijing had of course opened its back channels earlier with the Taliban). It would be pertinent to point out that China has previously hosted Taliban delegations in 2015 (Urumqi, Xinjiang) and in 2019 (Beijing).

Significance of meeting

Wang Yi’s meeting with the Taliban delegation is significant for more than one reason; it comes days after Pakistan Foreign Minister Shah Mehmood Qureshi had undertaken a two-day visit to China (July 23-July 24, 2021) for a strategic dialogue. During this meeting, both sides had agreed to work jointly to address the security challenges posed by the situation in Afghanistan. Apart from supporting peace talks and reconciliation, China had also made it clear that action needed to be taken against terror groups, which pose a security threat to Beijing, and both Islamabad and Beijing need to work jointly in this direction. In a press release posted on the website of the Chinese Foreign Minister, Wang Yi said:

We will work together to combat terrorism and push all major forces in Afghanistan to draw a clear line against terrorism, firmly combat the East Turkestan Islamic Movement (ETIM) and other terrorist forces, and resolutely stop Afghanistan from becoming a hotbed of terrorism.

China believes that the recent terror attack in Khyber Pakhtunkhwa (KPK province), which had resulted in the killing of 13 individuals (including 9 Chinese nationals) in a bus explosion (engineers and staff working on the Dasu Project were in the bus), was a possible handiwork of the East Turkistan Islamic Movement (ETIM). Beijing also sent a delegation to Pakistan to be part of an enquiry being conducted by Islamabad into the attack.

Finally, the meeting between Wang Yi and the Taliban delegation took place at a time when US Secretary of State Anthony Blinken was in India, and during his discussions with the Indian side Afghanistan was high on the agenda. Blinken had expressed concern about the rise in atrocities committed by the Taliban, and also said that the Taliban could not gain legitimacy by such steps and ultimately:

There’s only one path. And that’s at the negotiating table to resolve the conflicts peacefully, and to have an Afghanistan emerge that is governed in a genuinely inclusive way, and that is representative of all its people.

Beijing’s recognition of Taliban’s importance

At the same time, Wang Yi was unequivocal in flagging the threat to China from ETIM, and asked the Taliban to ‘completely sever ties’ with the group. The Taliban, on its part, assured Wang Yi that Taliban will not allow anyone to use Afghan soil against China. Wang Yi’s meeting send outs a strong message that Beijing clearly recognizes the role of the Taliban in resolving the current situation. The Taliban had also assured China earlier that it would ensure the safety of Chinese investments. Taliban spokesman Suhail Shaheen had, in a media interview in July 2021, stated:

China is a friendly country and we welcome it for reconstruction and developing Afghanistan…if [the Chinese] have investments, of course we will ensure their safety.

Difference between China-Russia and the US

The US approach vis-à-vis Afghanistan has been different from that of Beijing. While flagging its concerns, Beijing, realizing the ground realities, has sent out a clear message that it is willing to do business with the Taliban; the statements of Blinken, on the other hand, indicate US hesitancy vis-à-vis the Taliban. What is extremely interesting, however, are Blinken’s remarks during his visit to India stating that China’s involvement in Afghanistan could be positive. Given the fact that numerous commentators have been arguing that China and the US need to find common ground and that a zero-sum approach will not benefit anyone, this is a very interesting remark and should be welcomed since all stakeholders will need to work jointly in order to find a solution.

Conclusion

In conclusion, the situation in Afghanistan is perpetually evolving and requires all stakeholders in the region and outside to adopt a nuanced approach. The priority in the short run is to navigate the turbulence. In the midst of strained ties between Washington and Beijing, the US Secretary of State’s remarks regarding Beijing’s role in Afghanistan need to be welcomed.

What the rise of Raisi means for regional security and nuclear bargains

Introduction 

The triumph of hardliner Ebrahim Raisi in the recently-held Iranian Presidential election is likely to pose a challenge with regard to the renewal of the Joint Comprehensive Plan of Action JCPOA/Iran Nuclear Agreement (in 2019, US had imposed sanctions on him for human rights violations). Raisi, who has been serving as Iran’s Chief Justice since March 2019, will take over as President in August 2021 and will be replacing Hassan Rouhani, a moderate.

While he has not opposed the JCPOA in principle, Raisi is likely to be a tougher negotiator than his predecessor. This was evident from his first news conference, where he said that Iran will not kowtow to the West by limiting its missile capabilities or addressing concerns with regard to Iran’s role in the region’s security. In the news conference, he also stated that he will not be meeting US President Joe Biden.

The US has been guarded in its response to the election result. Commenting on the verdict and its likely impact on the Iran nuclear deal, US National Security Advisor Jake Sullivan stated: 

The ultimate decision for whether or not to go back into the deal lies with Iran’s supreme leader, and he was the same person before this election as he is after the election

Iran-China relations in recent years  

Chinese President Xi Jinping congratulated Raisi on his triumph, describing Iran and China as ‘comprehensive strategic partners.’ The Chinese President said that he was willing to work with Iran on a host of issues. Only last year, Iran and China had signed a 25-year strategic comprehensive agreement which sought to give a strong boost not just to economic ties between Tehran and Beijing, but security ties as well. One of the reasons cited for Tehran moving closer to Beijing has been the Trump administration’s withdrawal from the Iran-P5+1 agreement/JCPOA in 2018 and its lack of flexibility. From Beijing’s point of view, the deal was important not just for fulfilling its oil needs (according to the agreement, China would receive Iranian oil at a cheaper price). 

While there is no doubt that the Biden administration has made attempts to revive the Iran nuclear deal in recent months and the Vienna negotiations in which US has been indirectly involved, a solution does not seem in sight in the short run given that Raisi will replace Rouhani only in August. Also, if both sides stick to their stated position things are likely to get tougher. Interestingly, a senior Iranian official, presidential chief of staff Mahmoud Vaezi, indicated that the US had agreed to move over one thousand Trump-era sanctions, including those on insurance, oil, and shipping. 

The JCPOA has taken a break at the Vienna talks for some days and, commenting on this, Mikhail Ulyanov, permanent representative to Russia, said:

The task is to make full use of this break to ensure that all participants get final political instructions on the remaining controversial issues

Obstacles  

While many Democrats and strategic analysts had been arguing that the Biden administration needed to show greater urgency and move away from stated positions with regard to a return to the JCPOA, opposition from not just Republicans but hawks within his party made any such agreement impossible.  

Apart from domestic opposition, Biden will also need to deal with pressure from Israel. While it is true that GCC countries, like Saudi Arabia and the UAE, earlier opposed to the deal have been seeking to improve ties with Iran and have also softened their opposition to the deal, Israel has been opposed to JCPOA. The recently-elected Israeli Prime Minister Naftali Bennett’s stand vis-à-vis JCPOA is the same as Benjamin Netanyahu’s. After the Iranian election, the Israeli PM said: 

Raisi’s election is, I would say, the last chance for world powers to wake up before returning to the nuclear agreement, and understand who they are doing business with

Role of China and Russia  

It would be pertinent to point out that, days before the election, the Chinese Foreign Minister Wang Yi had stated that the US should remove sanctions vis-à-vis Iran. Given the fact that Raisi is anti-West, it is likely that China and Russia could play an important role in the revival of JCPOA.  

While there is merit in the Biden administration’s approach of removing sanctions against Iran in a stage-wise manner, since this may be politically more feasible, Washington needs to think innovatively and bear in mind that a rigid approach vis-à-vis Tehran will only make anti-Western sentiment in Iran more pronounced, and leave it with no choice but to move closer to China. GCC countries like the UAE and Saudi Arabia, which have been working towards resolving tensions with Iran, could also play an important role in talks between the Biden administration and a dispensation headed by Raisi.

In conclusion, the Biden Administration clearly has its task cut out. While negotiating with Raisi may not be easy, the fact that he has support of the supreme leader could be favourable, and the US could also use some of its allies to engage with the new administration.

US and China: Knowledge Deficit or Trade Deficit?

The problems with headlines such as this: “US Trade Balance With China Improves, but Sources of Tension Linger” are twofold. 

https://www.wsj.com/articles/u-s-trade-deficit-narrowed-in-december-as-exports-outpaced-imports-11612532757

A: It furnishes support to the notion that trade surpluses are FOREVER safe and trade deficits are INVARIABLY grave. That is not accurate because foreign countries will always wish to invest capital in countries like the US, which employ it relatively well. One clear case of a nation that borrowed massively from abroad, invested wisely and did excellently well is the United States itself. Although the US ran a trade deficit from 1831 to 1875, the borrowed financial capital went into projects like railroads that brought a substantial economic payoff. Likewise, South Korea had large trade deficits during the 1970s. However, it invested heavily in industry, and its economy multiplied. As a result, from 1985 to 1995, South Korea had enough trade surpluses to repay its past borrowing by exporting capital abroad. Furthermore, Norway’s current account deficit had reached 14 percent of GDP in the late 1970s, but the capital it imported enabled it to create one of the largest oil industries.

B: The headline makes a normative claim while equating bilateral trade deficit with the overarching narrative of bilateral tensions. Such normative claims follow from the author’s value-based reasoning, not from econometric investigation. China and the US may have ideological friction on many levels, but the surplus or deficit has much to do with demographics and population changes within a country at a given time. Nonetheless, a legacy of political rhetoric relishes on inflating and conflating matters. We hear a lot about the prediction that China is forecasted to become the largest economy by 2035, provoking many in the US to bat for protectionist policies. But we ignore the second part of this prediction. Based on population growth, migration (aided by liberal immigration policies) and total fertility rate, the US is forecasted to become the largest economy once again in 2098. 

Therefore, it is strange that a lot of the “trade deficit imbalance” headlines neglect to question if the borrower is investing the capital productively or not. A trade deficit is not always harmful, and no guarantee that running a trade surplus will bring substantial economic health. In fact, enormous trade asymmetries can be essential for creating economic development.

Lastly, isn’t it equally odd that this legacy of political rhetoric between the US and China makes it natural to frame trade deficits with China under the ‘China’s abuses and coercive power’ banner but intimidates the US establishment from honestly and openly confronting the knowledge deficit in SARS-CoV-2’s origin? How and when does a country decide to bring sociology to epistemology? Shouldn’t we all be concerned more about significant knowledge deficits?

“Building Back A Better World”: Can it challenge the BRI?

Introduction

Ever since taking over as President, Joe Biden has reiterated the need for the US and its allies to work together to check China’s economic rise by providing alternatives to China’s ambitious Belt and Road Initiative (BRI) project as well as its burgeoning technology scene. During his State of the Union address in April 2021, the US President had said:

China and other countries are closing in fast. We have to develop and dominate the products and technologies of the future

It would be pertinent to point out that 138 nations on five continents have signed various BRI cooperation agreements with China as of the end of 2020. (EU member states including Greece and Italy are also on board the BRI.) China has so far invested a whopping $690 billion in BRI-related projects in 100 countries.

G7 and the B3W

On June 12, 2021 the G7 unveiled the Building Back a Better World (BBBW/B3W), a brain child of the Biden Administration. The G7 leaders said that the B3W would be “values-driven, high-standard, and transparent.” During a conversation with Boris Johnson in March, the US President had discussed the need for an alternative to the BRI. A number of BRI related projects in developing countries in Asia and Africa have drawn criticism for lacking in transparency and not being economically sustainable, leading to debts which make countries dependent upon them or leads to a “Debt Trap (pdf).”

Debt trap has been defined as “a predatory system designed to ensnare countries into a straightjacket of debt servitude.” A prominent example of this is Sri Lanka, where when the South Asian nation’s debt burden vis-à-vis China became untenable, it was compelled to sign a 99-year lease with China through which Beijing got 70% stake in the strategic port of Hambantota. Many projects falling under the China Pakistan Economic Corridor (CPEC), too, have been under the cloud for lacking transparency and not being feasible. In certain cases, such as the Kyaukpyu port in Myanmar, Beijing has had to renegotiate the cost of projects (it was brought down from $7.3 billion to $1.3 billion) as a result of strong local opposition.

Alternatives to BRI

The Trump Administration received bi-partisan support for the BUILD (Better Utilisation of Investment Leading to Development ) Act, which created a new agency (the United States International Development and Financial Corporation, or USIDFC) with a corpus of $60 billion to facilitate private sector involvement in the Indo-Pacific, especially African countries. In 2018, the US Secretary of State Mike Pompeo had also made a commitment of $113 million to projects in the Indo-Pacific focused on technology, infrastructure, and energy. In November 2019, the US, Japan, and Australia had also launched the Blue Dot Network on the sidelines of the ASEAN Summit.

Then-US National Security Advisor Robert O Brien had compared the Blue Dot Network to Michelin Guide, which meant that just like a Michelin star is the sign of approval for a restaurant, a blue dot would be a seal of approval for infrastructural projects. Days before the G7 meeting, the inaugural meeting of the consultation group of the Blue Dot Network was held in Paris, apart from representatives from Western governments and Japan, other stakeholders such as members of civil society, academics, and 150 global executives participated in this meeting.

The US State Department, while commenting on the Blue Dot Network, had said:

The Blue Dot Network will be a globally recognized symbol of market-driven, transparent and sustainable infrastructure projects

Under the umbrella of Quad countries (US, Japan, Australia, and India), too, there has been discussion on enhancing economic cooperation as well as connectivity.

Opportunities for the B3W

There is an opportunity for the B3W, since in the aftermath of Covid, certain BRI projects have slowed down. Second, the geographical scope of BBBW is much wider than that of the projects under the Indo-Pacific (B3W will also include Latin America and Caribbean). BBBW can also hardsell its strengths such as transparency and sustainability – both economic and environmental. It also can dovetail with some of Biden’s ambitious economic schemes related to the economy and infrastructure. The fact that Biden is willing to take the lead, unlike Trump, is reassuring for allies and sends out a positive message to developing countries looking for alternatives to the BRI. While addressing a press conference after G7, the US President made this point:

The lack of participation in the past and in full engagement was noticed significantly not only by the leaders of those countries, but by the people in the G-7 countries, and America’s back in the business of leading the world alongside nations who share our most deeply held values

The US had also categorically clarified that the B3W seeks to provide an alternative to BRI, but it is not merely about targeting China.

Possible limitations of B3W

Yet, there are limitations. First, the B3W still does not have a clear blue print. Second, it would be tough to match the BRI in terms of resources. Third, a number of G7 members who themselves share good relations with China may be reluctant to get on board the initiative (even though it has been made clear that the B3W initiative is not just about targeting China).

Conclusion

In conclusion, a lot will depend upon how much not just the US government and big businesses are willing to invest in the B3W (since the model will be different from the BRI, which is one of ‘state capitalism’) but whether other members of the G7 are willing to play a proactive role in such a project. An alternative is needed to the BRI and the announcement of B3W is welcome. Taking it forward and competing with BRI may not be impossible but is certainly a tough task.

State formation in Korea and Japan

State formation in Korea and Japan occurred a thousand years before it did in Europe, and it occurred for reasons of emulation and learning, not bellicist competition. Korea and Japan emerged as states between the 4th and 8th centuries CE and existed for centuries thereafter with centralized bureaucratic control defined over territory and administrative capacity to tax their populations, field large militaries, and provide extensive public goods. They created these institutions not to wage war or suppress revolt – the longevity of dynasties in these countries is evidence of both the peacefulness of their region and their internal stability. Rather, Korea and Japan developed state institutions through emulation and learning from China. State formation in historical East Asia occurred under a hegemonic system in which war was relatively rare, not under a balance of power system with regular existential threats. Why? We focus here on diffusion through a combination of emulation and learning: domestic elites copied Chinese civilization for reasons of prestige and domestic legitimacy.

This is good, and it comes out of the most interesting journal in international relations today, but it doesn’t quite do it for me. I think China’s imperialism was far looser than contemporary scholars imagine, especially as China spread territorially outside of its cultural hearth. I think China’s imperial sovereigns were more akin to Emperors in the Holy Roman Empire than, say, Louis XIV. I do think that Japan and Korea mimicked China, which is exactly why both countries had relatively decentralized political systems up until the 19th and 20th centuries.

Contemporary scholarship has a soft spot for pre-modern (before 1500 AD) non-Western state systems, so you get stuff like this. Again, this is a great article, and you should read it right now, but I don’t buy it. I don’t think Japan and Korea were states that existed for centuries “with centralized bureaucratic control defined over territory and administrative capacity to tax their populations, field large militaries, and provide extensive public goods.” That’s too rich for my blood. There were cultural hearths and polities in Japan and Korea that tried to mimic China, but sovereignty was still far too fractal until the Europeans arrived with their formal imperialism. See this piece for an example of why I’m skeptical of the author’s claims.

Biden’s Summit on Climate and Xi’s Belt and Road Initiative

Introduction 

US President Joe Biden hosted a Summit on Climate (April 22-23, 2021) which was attended by 40 world leaders, including Chinese President Xi Jinping. Ever since taking over as President, Biden has sent out a strong message that the US would take a leadership role as far as climate issues are concerned. During his address at the Summit, the US President also dubbed this decade as decisive. Said Biden: 

Scientists tell us that this is the decisive decade – this is the decade we must make decisions that will avoid the worst consequences of the climate crisis. 

Under the Trump Administration, the US had withdrawn from the Paris Agreement, while one of Biden’s first steps was getting the US to re-join the Paris Agreement, and he has also made a commitment of $1.2 billion to a Green Climate Fund.  Another important component of Biden’s climate change agenda includes an infrastructural package, which seeks to invest in clean energy transition. The Biden Administration has also been laying emphasis on creating clean energy jobs, and greater investment in Research and Development (R and D) related to clean energy. 

US-China scope for cooperation? 

While ties between US and China have witnessed a serious deterioration in recent weeks, Chinese President Xi Jinping attended the Climate Change Summit. Days before the Climate Summit, Xi, while addressing the Boao Forum at Hainan, was critical of the US for promoting a cold war mentality, but did clearly leave the door open for cooperation with the US in dealing with common challenges posed by climate change.

In spite of the downward spiral in bilateral relations, Biden and members of his administration have also repeatedly stated that there is scope for the US and China to work together.

Biden’s Climate Change envoy, John Kerry, had visited China earlier this month, and during the course of his trip exchanged notes with China’s special envoy for climate change, Xie Zhenhua. A joint statement released by both sides stated

The United States and China are committed to cooperating with each other and with other countries to tackle the climate crisis, which must be addressed with the seriousness and urgency that it demands,

An invitation to Chinese President Xi Jinping to attend the Summit was extended during Kerry’s visit, though China did not give any confirmation (Xi gave his confirmation to attend the Summit one day before).

Agenda of the Summit

During the summit, the US President made a commitment that US would reduce its greenhouse gas emissions by around 50% below its 2005 emissions levels, by 2030. (Former US President Barack Obama had made a commitment to reducing emissions around 26-28% by 2025.) Biden’s announcement has been hailed by some, and being cited as a reiteration of the point that Biden wants to show the way on climate change. Biden’s announcement may be opposed by certain quarters within the US who feel that the US should not be compelled to reduce emissions drastically.

Before the Summit, China had made it clear that it would not toe the US line. During John Kerry’s China visit the Chinese Vice Foreign Minister, Le Yusheng, said:  

Some countries are asking China to achieve the goals earlier. I am afraid this is not very realistic.

While addressing the summit, Chinese President Xi Jinping reiterated a commitment he had made last year while addressing the United Nations General Assembly (UNGA): that China would achieve carbon neutrality by 2060, and to peak carbon emissions by 2030. He reiterated the need for global cooperation. 

How Biden and Xi linked their commitment to environment with their economic visions 

What was interesting was that both Biden and Xi Jinping also linked the climate goals to their economic goals. Xi Jinping spoke about a focus on a ‘green’ Belt and Road Initiative (BRI). Interestingly, the mega connectivity project, often dubbed as China’s ‘Marshall Plan,’ has often been criticised not just for its lack of transparency, but also for the fact that it is not environmentally friendly (in fact many observers have argued that Biden’s infrastructural plan is a counter to China’s BRI).

Biden has repeatedly spoken about creating clean jobs and infrastructure and repeated the same during his address. 

Conclusion

In conclusion, while Washington-Beijing ties are likely to face numerous strains, climate change seems to be one area where there is space for cooperation between the two. While the US under Biden is likely to follow a significantly different approach from that under Trump, China is unlikely to budge from its commitments. What would be interesting to see is whether Beijing actually addresses criticisms of the BRI not being environmentally friendly. While China and the US may find some common ground on climate change, it is likely that the Biden administration, given its focus on the environment, may come down more harshly on the BRI and may come up with an alternative.

Nightcap

  1. Free speech is more important than ever Niall Ferguson, Quillette
  2. Is it racist to expect black kids to do real math? John McWhorter, It Bears Mentioning
  3. Revolt of the three feudatories Wikipedia
  4. War and trade in the peaceful century (pdf) Karlsson & Hedberg, EHR