The narrative of Chinese “debt diplomacy” is rather simplistic: Lending by state-owned banks is not transparent, encourages corruption, and serves primarily Chinese corporations, it goes. This would lead inevitably into a debt trap. It appears as if Beijing’s policy is fundamentally different from the practices of international financial institutions, governments of Western industrialized countries or large commercial banks.
It may sound like a matter of routine: The German frigate ‘Bayern’ is about to set sail and spend several months cruising in the Indian Ocean and the Western Pacific. The Defense Ministry merely wants to see this just as a “sign” to fly the flag where Germany’s “values and interests are affected”. However, behind this there is a fundamental paradigm shift.
After the ouster of the elected government in Myanmar on February 1 of this year, the Peking government finds itself sitting on the fence: Between the army, the Civil Disobedience Movement CDM, Aung San Suu Kyi’s NLD and her elected government, and the international opinion. This is why for some observers it is “not happy with the coup”.
The deployment of the frigate ‚Bayern’ to a cruise in the Indian Ocean and the Pacific in summer this year is intended to lend substance to the “Guidelines on the Indo-Pacific” adopted by the German government last September and to the pronouncements of Annegret Kramp-Karrenbauer, Minister of Defense, that it “will expand its commitment to security policy to the Indo-Pacific”.
„China and Pakistan fall out over Belt and Road frameworks,” trumpeted the Japanese business publication Nikkei Asia on January 19. There is no secret about the exasperation, even alarm, regarding what President Xi Jinping once called “brotherly” Sino-Pakistani cooperation in general and the China Pakistan Economic Corridor project in particular. This probably raised some hopeful expectations in New Delhi.
When China’s Foreign Minister Wang Yi visited Myanmar in January this year, he combined the announcement of vaccine supplies with offers of deepened economic cooperation. The timing of the visit was astute, coming after the party of Aung San Suu Kyi, the NLD, was re-elected for a second term in November 2020 – and two weeks before the military coup.
Ethiopia has become one of Africa’s fastest-growing economies. The rail link between Djibouti on the Red Sea and Addis Ababa, built with Chinese credit and by Chinese companies, provides the landlocked country with a connection to the ‚Maritime Silk Road’. An escalation of the civil war, which broke out in Ethiopia’s Tigray Province in early November, would be damaging to Beijing’s plans for Africa.
One of the prevalent complaints about the Belt&Road Initiative is that Chinese labour would provide the bulk of the workforce in many projects. This applies mainly to large construction projects, rather than to factories such as those in Ethiopia’s Special Economic Zones. But these claims, which have also translated into tangible protests as in Laos, Vietnam and Turkmenistan, are major scratches on the image of Silk Road projects and their promises of prosperity.
Hardly anyone outside Asia and academic circles is really looking at Southeast Asia – except just now, when the world’s largest free trade zone was agreed with RCEP. But this is a passing interest that is also mainly focused on the question: What does this mean for China, what games is Beijing playing? And in Europe it raises the anxious expectations: What does this mean for our economy, our companies, our exports?
When fifteen Asia-Pacific countries signed the free trade agreement RCEP in Mid-November it was an event with exceptional dimensions: It creates an economic zone with a population of 2.2 billion people and around one third of the world’s economic output. There are three of Asia’s four leading economies – China, Japan and South Korea – first time together involved.