Belt and Road Initiative
The Belt and Road Initiative (BRI), formerly the One Belt, One Road is an umbrella term used to cover a range of Chinese funded, and usually Chinese built, infrastructure projects around the globe. Usually it's a condition of funding that the host country use Chinese companies, and often Chinese workers, to build the project. Often the relevant facilities are then run by Chinese personnel. For economically vulnerable countries with ambitious leaders, a big advantage of Belt and Road money is that it rarely involves the accountability and transparency requirements of a regular loan, and is often accompanied by massive political donations. If the host country can't make the payments, China than repossesses the project.
The basic is idea is rebuilding the ancient Silk Route between Europe and China through the Islamic world, however China is also building a modern navy and ports to access raw materials from Africa for its manufacturing base. The Chinese Communist Party's loss of free access to the American consumer market to dump cheap manufactured goods, couple with worldwide revulsion stemming from the CCP's criminal negligence and mishandling of the CCP global pandemic, has dampened enthusiasm for the project outside of China. Massive unemployment inside China resulting from the CCP virus and imminent trade restrictions due years of human rights abuses by the communist regime portend instability for years to come.
On March 27, 2021 China and Iran signed a comprehensive strategic 25-year partnership agreement on economic and security cooperation. Iran will receive $400 billion dollars in Chinese investments over the next 25 years in key Iranian economic sectors, including energy, telecommunications, defense, infrastructure, banking, petrochemicals, railways and ports. There will be also an expansion of military assistance, training and intelligence-sharing. Nearly 100 projects are under consideration. In return, Iran will commit to providing regular and heavily discounted oil, gas and possibly other natural resources to China.
For China, Iran is a welcome counterbalance to US influence in the region, as the only large regional power that is not aligned with the US, in addition to having enormous oil and natural gas resources and providing a large market of more than 80 million citizens for Chinese goods.
The agreement has been underway for five years, ever since Chinese President Xi Jinping visited Iran in January 2016, when establishing a "comprehensive strategic partnership" was agreed. At that meeting, according to China's Ministry of Foreign Affairs, "Xi Jinping stressed that China will enhance all-round practical cooperation with Iran within the 'Belt and Road' framework". At the time, the two countries also signed a Memorandum of Understanding "on jointly advancing construction of the Silk Road Economic Belt and the 21st Century Maritime Silk Road" as well as "multiple bilateral cooperation documents covering energy, production capacity, finance, investment, communications, culture, justice, science, technology, news, customs, climate change and human resources". China and Iran also agreed then to "strengthen exchanges between think-tanks, colleges and universities and youths, [and] jointly ensure the successful operation of the Confucius Institutes" to "tell China's story well" and shape the narrative about China in Iran.
The agreement formalized the Belt and Road Initiative (BRI) in Iran. Iran participates in China's so-called Digital Silk Road, the Silk Road of Innovation and the "Green" Silk Road. The Digital Silk Road represents the Chinese Communist Party's (CCP's) ambition, among other things, to shape the course of 5G technology in the world, whereas the Silk Road of Innovation is about technology transfers. The "Green" Silk Road is about transitioning to renewable energy sources. "China is the largest foreign investor in the... Middle East region", according to Dr. Mordechai Chaziz, author of China's Middle East Diplomacy: The Belt and Road Strategic Partnership.
The signing of the agreement came at a time when China was already defying US sanctions on Iran in other ways -- such as by reportedly importing record volumes of crude oil. "Iran moved about 17.8 million tonnes (306,000 barrels per day) of crude into China during the past 14 months, with volumes reaching record levels in January and February" Reuters reported. In March, 2021 according to some estimates, China was taking in some 856,000 barrels per day of Iranian crude oil, a 129% surge compared to February.
As China is Iran's largest trading partner, the agreement, in addition to providing Iran with modern technology, would help its economy to grow. China, among other countries, helped Iran with its nuclear development several decades ago and has been regularly championing a return to the Iran nuclear deal or the JCPOA. For China, Iran is a welcome counterbalance to US influence in the region, as the only large regional power that is not aligned with the US, in addition to having enormous oil and natural gas resources and providing a large market of more than 80 million citizens for Chinese goods. The two countries, despite their marked ideological differences, share an authoritarian, anti-Western outlook, making each attractive to the other. According to a recent report by risk consultancy firm Verisk Maplecroft: "China is pivoting towards more autocratic regimes that represent greater stability for its supply lines than democracies that are, or may become, hostile to Beijing". China has even helped Iran crack down on dissidents by exporting its digital authoritarianism in the form of surveillance equipment.
Developing world debt trap
The most notorious Belt and Road project is the Hambantota port in Sri Lanka that is now Chinese owned after the Sri Lankan government couldn't meet repayments and now hosts Chinese submarines. There are many other projects in Europe, Africa, Asia, and the Pacific. For instance,
- a hydro dam in Ecuador;
- a Chinese run satellite control station in Argentina;
- a railway upgrade in Hungary;
- a facial recognition project in Zimbabwe;
- port construction and operation projects in Israel;
- coal-fired power stations in Pakistan;
- gas pipelines in Tajikistan;
- a new port in Burma with rail access to China
- a high-speed rail line in Java and
- a wharf big enough for an aircraft carrier in Vanuatu
The Burma port is intended to ship Persian Gulf oil to China without rounding the cape at Singapore, with the sea lanes defended by the Chinese naval base at Sri Lanka; the Vanuatu wharf is to counter the U.S. naval presence at Guam which defends shipping lanes of Persian Gulf oil through the South China Sea to Taiwan, Japan, and South Korea, key U.S. allies and trading partners.
Zimbabwe is also a key supplier of lithium, used to power electric cars and iphones. Communist China is seeking to dominate the world supply by making countries indebted to it through the Belt and Road inititiative. Australia, Argentina, and Namibia are also big suppliers.
One key element in Communist China's Belt and Road ambitions is building a modern ocean-going navy; prior to 2017 Communist China's military budget was largely funded by its trade surplus with the United States. American consumers were paying to build a navy to rival its own through the purchase of cheap Chinese manufactured goods and consumer products. American taxpayers then had to meet the challenge of rival military spending by modernization and upgrades of its own defense budget.
China has been looking to construct a 120 kilometer mega canal cutting through the Isthmus of Kra, the narrowest part of the Malay Peninsula in Thailand. This will open the South China Sea to the Indian Ocean, bypassing the Strait of Malacca. What China is eyeing is a canal project in Thailand called the Kra Canal and the Thai leadership seems to be on board. Through this canal China is trying to reduce dependence on the Strait of Malacca. Currently 80 percent of China's oil imports passed through the South China Sea.
The Strait of Malacca is a key reason why China has not been able to grow too powerful. Democratic and powers such as India, Australia, and other Southeast Asian nations are well-positioned to cut off Chinese supply lines in the event of a major military confrontation by creating a blockade around the Strait of Malacca. China wants to ensure that its commercial and naval vessels find an alternate route that altogether avoids the Malacca choke point while travelling between the Indian and Pacific Oceans. This is an overhang of the maritime portion of Xi Jinping's Belt and Road initiative that seeks to connect Southeast Asia with the Middle East and Europe.