China’s Marshall Plan
When Chinese President Xi Jinping introduced the idea in 2013 of a 21st century Silk Road, his expressed purpose was economic development along the routes. The land-and-sea route was envisioned as promoting regional economic cooperation, strengthening relationships between civilizations and promoting world peace and development.
Referred to as the Belt and Road Initiative, or BRI, the project encompasses over 70 countries in Asia, Europe and Africa which together include half the world’s population and a quarter of world GDP. It extends from several major Chinese cities to Indonesia, Kenya, the Mediterranean Sea and as far west as the Netherlands, with numerous points in between.
Although Chinese scholars deny that the BRI and the Marshall Plan are comparable, a February 2016 article in The Diplomat found similarities based upon official Chinese communications. According to the article written by Simon Shen, both anticipated increasing exports, the U.S. exporting to Europe, and China exporting to Asia, Africa and Europe; both sought to increase international use of their respective currencies; both desired to achieve global influence; and both wanted to strengthen political ties.
A sampling of the projects illustrates the scope of BRI, as well as its effects. Duisburg, Germany is a former rust-belt town that BRI made its first European stop for 80% of the trains from China. According to a July 2018 article in The Guardian, approximately 30 trains arrive from China each week stocked with Chinese goods for further distribution via waiting ships on the Rhine River, and connecting from there to countries throughout Western Europe. So far, for every two full containers transiting through Duisburg from China, only one makes the return trip fully loaded
Kenya signed an agreement for China to build a railway from the port of Mombasa to Kenya’s capital, Nairobi. The 293-mile line opened in June 2017, cutting an eight-hour journey down to five hours. The line was 90% financed by China; it is run by Chinese Communications Construction Company. The line has had its critics, accusing it of not being economically viable, of taking livelihoods from Kenyan trucking businesses and of discrimination against local employees.
The Tanzanian fishing village of Bagamoyo was selected as the location of what will become the largest port in Africa. The ten-billion-dollar project will clear Bagamoyo and four other villages to make way for factories and apartment blocks to house a future population of 75,000. Other projects include a power station in Bangladesh, high-speed rail lines in Iran and Indonesia, a 715-mile six lane highway in Pakistan between Karachi and Lahore, and a 470-mile electric railway connecting Addis Ababa in Ethiopia to the port of Djibouti on the horn of Africa, site of China’s first overseas military base. This port links 400 million people living in the nineteen countries that make up the Common Market for Eastern and Southern Africa (COMESA).
BRI is expected to cost as much as 1.3 trillion dollars, thirteen times the 100 billion dollars the Marshall Plan expended in current dollars. Undoubtedly BRI is creating great enthusiasm in countries that have long-standing, unfulfilled needs for infrastructure improvements. But because practically all new projects are funded by Chinese commercial loans, countries are assuming high levels of debt. In recent years China has written off debt in exchange for territory or, in the case of Sri Lanka, assumed control of a China-financed seaport as payment. In contrast, funds under the Marshall Plan were in the form of grants. Although BRI and the Marshall Plan had similar objectives, BRI projects must prove profitable for the countries receiving them. If not, those countries will face insurmountable levels of debt that in some cases approach the size of their national GDP. In that event, it will remain to be seen how many of those new and enlarged ports around the Indian Ocean will instead host the submarines, aircraft carriers and warships that the Chinese navy is building.