Generational Dynamics World View

[John J. Xenakis]

*** 5-Aug-18 World View -- China mocks America's 'Indo-Pacific' strategy at ASEAN meeting

This morning's key headlines from GenerationalDynamics.com

• China mocks America's 'Indo-Pacific' strategy at ASEAN meeting
  
• Concerns grow over China's debt strategy for Belt and Road Initiative (BRI)
  

****
**** China mocks America's 'Indo-Pacific' strategy at ASEAN meeting
****


Donald Trump meets Vietnam's leader Tran Dai Quang in Hanoi last year (Reuters)

Neither China nor the United States is a member of the Association of
Southeast Nations (ASEAN), but both had representatives present, and
their competing strategies were the main subjects of discussion.
ASEAN has ten members: Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand and Vietnam.

For lexicographers and cartographers, the main news is that Western
nations, including Australia and the US, have given a new name to
their strategies, referring to the "Indo-Pacific strategy" instead of
the old name, "Asia-Pacific strategy."

US Secretary of State Mike Pompeo had earlier discussed a plan to
invest $113 million in technology, energy and infrastructure in the
Indo-Pacific region. On Saturday he added:

<QUOTE>"As part of our commitment to advancing regional
security in the Indo-Pacific, the United States is excited to
announce nearly $300 million in new funding to reinforce security
cooperation throughout the entire region."<END QUOTE>

The reason for the change in terminology is to emphasize that the
Pacific Ocean and the India Ocean form a combined strategic region.
However, the terminology change is annoying to the Chinese, who prefer
the China-centric name "Asia-Pacific," while the name "Indo-Pacific"
gives more emphasis to China's historic enemy, India.

Chinese media were bitterly scathing in their response to Pompeo's
announcements:

<QUOTE>"What is the Indo-Pacific strategy? Many complain
about its vagueness. Its most innovative part may be the name
itself. Washington probably hopes the rest of the world would stop
asking questions, tacitly understand Washington's intentions and
firmly gather around the US after a few exchanges of glances and
together begin to counter China's rising influence....

ASEAN members are not sure what the US Indo-Pacific strategy
entails. The US announced only an investment of $113 million,
which also includes India. The amount seems only sufficient to
build an overpass perhaps in the center of Mumbai. Washington is
using a strategic gimmick. It is insincere about pushing forward
economic prosperity of Indo-Pacific region....

As a concept, Indo-Pacific strategy generated some media and
psychological impact. But this is perhaps the only points it can
score. If the US wants more, this strategy will be the abyss that
consumes much US resources and its output can hardly match its
input.

What's more important, this is not the era where geopolitics rules
all. The US has treated China's Belt and Road initiative, which
focuses on mutually beneficial cooperation, as strategic
expansion, and is trying to prohibit Asia from marching forward
through connectivity. Washington's move is against historic
tide. Even if it plans to invest 100 times its current amount, the
investment will be devoured by the historic trend."<END QUOTE>

The commentary mentions China's Belt and Road Initiative (BRI), where
China has committed $900 billion (with a "b") to Asian countries, in
contrast to America's "paltry" commitment of $133 million (with an
"m"). Reuters and Global Times (Beijing) and Asia Times and ASEAN


****
**** Concerns grow over China's debt strategy for Belt and Road Initiative (BRI)
****

Many ASEAN countries were disappointed at the lack of specifics in
Pompeo's promise that "The United States will continue to create the
conditions for mutual prosperity in a free and open Indo-Pacific."

However, many of these countries are quite concerned about the
numerous problems associated with BRI, including corruption scandals
and concerns about opaque financing, delays and mounting debt problems
linked to the loans Beijing has provided to its partner countries.

In the past couple of years, we've seen how these projects work, in
countries like Sri Lanka, Kenya, Djibouti, Malaysia and Pakistan:

• China loans a country tens of billions of dollars for
  infrastructure development.
  
  
• The country will have to repay that plus interest; failure
  to make payments means that China takes control of the infrasture
  project, such as a seaport, and the entire surrounding area.
  
  
• Local workers are given few jobs. Instead, a flood of Chinese
  workers come to the region to do all the work. There salaries are
  paid out of the loan money, which the workers often send back to
  China. So the country has to repay the loan plus pay the salaries,
  which means that the country repays the loan to China twice, plus
  interest.
  
  
• All parts and services for the infrastructure project are
  purchased from China, and paid for out of the loan money. Once again,
  the country is repaying the loan to China twice, this time for the
  parts.
  
  
• China establishes a large community of Chinese workers and
  families around the infrastructure project. As we've described in the past,
  these Chinese
  workers and families are controlled by Beijing's international
  coercive propaganda agency, the "United Front Work Department" (UFWD).
  They will be around for decades, because they have to do the
  maintenance after the project is completed.

Malaysia has suspended a $14 billion rail line because of graft and
corruption. Pakistan cancelled a $14 billion dam project last year
because of excessive debts. Kenya accused China of "neo-colonialism,
racism and blatant discrimination." Other countries are extremely
anxious about Chinese investments.

The US offer of $113 million plus $300 million is paltry compared
to China's offer, but the US offer is aid, not a loan, and
it's the local workers who will build the infrastructure project.

That's why, when announcing these aid packages, Pompeo emphasized
"partnership, not domination" in Asia, and promised to "create the
conditions for mutual prosperity in a free and open Indo-Pacific."
Nikkei and Malay Mail and Washington Examiner

Related Articles

• Australia passes foreign influence laws, targeting China (29-Jun-2018)
  
  
• China's railway contractor in Kenya accused of 'neo-colonialism, racism and blatant discrimination' (14-Jul-2018)
  
  
• Mahathir promises to reduce Malaysia's debt and China's influence (31-May-2018)
  
  
• Pakistan overwhelmed and China alarmed over the China-Pakistan Economic Corridor (CPEC) (12-Dec-2017)
  
  
• China takes control of strategic Hambantota seaport in Sri Lanka, raising concerns in India (11-Dec-2017)
  
  
• China establishes its first foreign military base, in Djibouti (13-Jul-2017)
  

KEYS: Generational Dynamics, Association of Southeast Asian Nations, ASEAN,
Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, Philippines, Singapore, Thailand, Vietnam,
China, Asia-Pacific, Indo-Pacific, India, Mike Pompeo,
Sri Lanka, Kenya, Djibouti, Malaysia, Pakistan

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John J. Xenakis
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