Foremost among the doubters, or at least the most blunt-spoken, is Malaysia’s newly elected but much-seasoned prime minister, Mahathir Mohamad, who this month announced the cancellation of two huge Chinese projects in his country. During a visit to Beijing, Mr. Mahathir bluntly told his hosts that “we do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries.” A $13.4 billion rail line and a $2.5 billion deal to build gas pipelines, he said, threatened to bankrupt his country.
In an interview with the New York Times, the 93-year-old leader, who won an upset victory in May on a platform of combating corruption, was even more explicit. He charged that the previous prime minister, Najib Razak, had used inflated deals with China to replace money stolen from a state investment fund. He compared the deals China is striking with countries such as his to the “unequal treaties in the past imposed upon China by Western powers.”
The Malaysian leader’s unvarnished assessment could be applied to a number of other countries enlisted by China for Belt and Road, which includes scores of projects from Vanuatu to Colombia, with spending expected to mount into the trillions of dollars. While many nations need the ports, railroads and pipelines China is pushing, often they can ill afford the terms. Most are funded by loans from Chinese banks and built by Chinese firms that frequently import their own labor. Independent studies have concluded that many governments will struggle to repay the loans — which may give Beijing political as well as economic leverage.
Already, Sri Lanka was forced to hand over a new deepwater port to a Chinese company after it was unable to make payments. In Malaysia, China is still committed to building a $10 billion port on the strategic strait of Malacca — a facility that is commercially questionable but deep enough to accommodate Chinese aircraft carriers. Another port is underway in Gwadar, Pakistan, the terminus of a grandiose China-Pakistan Economic Corridor that has added billions to Pakistan’s debt.
The Trump administration, like the Obama administration before it, has been warning of the economic dangers and hidden geopolitical costs of Belt and Road; a recent Pentagon report said it is meant to “deter confrontation or criticism of China’s approach to sensitive issues.” But President Trump killed the leading U.S. alternative for many Asian countries, the Trans-Pacific Partnership trade agreement. Last month, the administration launched a new Indo-Pacific development program with a paltry $115 million in funding. A real alternative for countries such as Malaysia will require far more than that.