In April 2023, John Thornton, Director of the Global Leadership Program at Tsinghua University in Beijing and former President and Co-Chief Operating Officer of the Goldman Sachs Group, disclosed that in 2013 China’s president Xi Jinping told then-U.S. Secretary of State John Kerry that American participation in the One Belt, One Road development project was welcome.
Kerry told Thornton that before his delegation returned to Washington, D.C., a Treasury Department mandarin [probably Treasury Secretary Jack Lew] nixed the idea, and that not taking up China’s offer was “the single biggest missed opportunity of my life”.
On hearing this one might muse about “What might have been,” but would the project have succeeded with two bosses? Would China have been satisfied with partnership with the U.S.?
The answers are: No and No.
When Kerry met Xi in April 2013, Xi was new to the job (he became General Secretary of the Communist Party of China and Chairman of the Central Military Commission in November 2012, and President of the People’s Republic of China in March 2013), and at the time was apparently amenable to cooperating with the U.S. on a high-profile project.
In 2008, China hosted the Summer Olympics which CNN called “a soft power victory for Beijing.” China was criticized for increased repression in the run-up to the games, participation of underage gymnasts, abuse of migrant workers, and censorship of protests, among other things, but the games still represented China’s formal emergence on the world stage. Xi would have been anxious to claim another success for China early in his tenure by teaming with the U.S. (as the “G-2”) in an ambitious undertaking.
In September 2013, Xi announced the “Silk Road Economic Belt,” later rechristened the Belt and Road Initiative (BRI), which has enrolled 151 countries, almost 75% of the world’s population and more than half of the world’s GDP. BRI’s scope has steadily expanded and emphasizes, according to the U.S. Congressional Research Service, “economic policy coordination, trade and investment facilitation, dispute settlement, tourism, student and personnel exchanges, and cooperation in research and development, standards, and media.”
China’s steady progress was displayed in May 2023 at the China-Central Asia Summit in Xi’an, China, the Eastern terminus of the ancient Silk Road. At the summit, the third since 2020, the leaders of China and the Central Asian republics “…approved US$3.72 billion in regional grants, signed 54 major multilateral agreements, created 19 new regional platforms and signed a further 9 multilateral cooperation documents,” according to Silk Road Briefing. Xi called for a “shared future” for the “China-Central Asia community” amid plans to increase mutual trade to US$100 billion by 2030.
That same week at the G-7 meeting in Tokyo the leaders of the West castigated China for “economic coercion” which probably caused some confusion in Beijing as Washington is the source of economic sanctions “that currently cover 29 percent of the global economy and 40 percent of global oil reserves.” But even if it was momentary bemused by the G-7 outburst, Beijing probably welcomed the opportunity to contrast threats from the G-7 with what it could highlight as practical steps to grow mutually beneficial partnerships and seek solutions to shared challenges.
If the U.S. participated in the BRI, the Congress would have been involved and Chinese officials and businessmen would have had to endure the Long March through the Hill’s authorization and appropriation process, complete with camera-ready legislators and teary-eyed witness testifying to Chinese perfidy.
Congress would have demanded that Chinese officials testify under oath while scotching reciprocal appearances by U.S. officials in China, and would have attached conditions, such as special consideration for America’s latest self-identified marginalized groups, that would be difficult or impossible for China to satisfy, thus endangering future funding. The U.S. may have used sanctions to block Chinese firms from participating, then demanded a U.S. company take over the project.
The Americans would have channeled Sir Humphrey Appleby when he said of the European Union, “We had to break the whole thing up, so we had to get inside.”
If the project crashed and burned due to what China viewed as American sabotage, U.S.-China relations would have as bad as they are now, but it would have happened sooner. Unfortunately, for a large slice of the U.S. political and media community this is not a bug, but a feature.
The West has realized that BRI cannot be wished so it introduced competing projects that lack the scope and funding of China’s effort.
In June 2022, the G7 announced the Partnership for Global Infrastructure and Investment (PGII) which will mobilize $600 billion to counter China’s Belt and Road Initiative. PGII is the rebranded Build Back Better World,” which was announced in 2021 but stalled. How PGII will complement the European Union’s EUR 300 billion Global Gateway is unknown, but PGII will focus on clean energy, health systems, gender equality and information and communications technology, reinforcing the old saw, “China does civil engineering and the West does social engineering.”
At the June 2023 meeting, the G7 discussed PGII and issued a fact sheet replete with 40 projects which are no doubt existing efforts brought under the PGII umbrella. What the G7 has to explain to developing countries is how they will industrialize with vanity projects like “just energy transitions away from fossil fuels” when the Industrial Revolution that made the United Kingdom a superpower was fueled with coal.
What did Xi think as the weeks passed with no message from the White House? Am I being ghosted?
Well, time (and political opportunity) wait for no man so, in September 2013 in Astana, Kazakhstan, Xi unfurled the Silk Road Economic Belt and changed development spending forever by giving developing countries many opportunities that came with an important feature: non-interference in the internal affairs of the borrower (though those Communists in Beijing expect to be repaid, and with interest.)
Then, in October 2018, then-U.S. Vice-President Mike Pence, declared, “China uses so-called ‘debt diplomacy’ to expand its influence” but offered only one example: the Hambantota Port project in Sri Lanka that, Pence claimed, “may soon become a forward military base for China’s growing blue-water navy.”
A study of BRI by Chatham House (definitely not Panda-huggers!) found “The [Hambantota] port was one of several ‘white elephant’ projects promoted by Mahinda Rajapaksa as part of a corrupt and unsustainable developmental programme…Sri Lanka’s debt distress was unconnected to Chinese lending, arising instead from excessive borrowing on Western-dominated capital markets and from structural problems within the Sri Lankan economy…Chinese navy vessels cannot use the port, which will instead become the new base of Sri Lanka’s own southern naval command.”
Chatham House concluded that the process is not directed from Beijing by a “top-down strategic masterplan” and that projects are also shaped by the goals of the borrowers.
An analysis of 100 confidential BRI loan agreements in “How China Lends: A Rare Look into 100 Debt Contracts with Foreign Governments” found that China’s loan agreements are written to benefit the lender (no surprise there), and the agreements emphasize confidentiality and ensuring China’s debt is always senior. Though China claims to not interfere in other countries internal affairs, the report authors conclude the terms “potentially allow the lenders to influence debtors’ domestic and foreign policies. Even if these terms were unenforceable in court, the mix of confidentiality, seniority, and policy influence could limit the sovereign debtor’s crisis management options and complicate debt renegotiation.”
In other words, China, like any other lender, will do what it must to ensure it is repaid.
So, instead of “what might have been” with BRI, how about “what should have happened.”
Xi had the reasonable expectation, for a head of state, that his intentions would be accurately communicated to his opposite number, not rejected by the staff.
Secretary Kerry and his Treasury Department confederate failed to observe a cardinal rule of staff work: always give your boss an opportunity to shine. If President Obama had heard Xi’s proposal, he would have had a perfect excuse to talk to Xi. If Obama thought it wouldn’t work, Xi would have been disappointed but would have known the man he considers his equal – the American president – had considered his proposal and respected him enough to pick up the phone to deliver the bad news himself.
Though it unnerves staffs when bosses wander into unscripted territory, an Obama-Xi discussion may have paved the way for other opportunities and may have built trust with Xi when he was starting his lengthy tenure as China’s leader.
Unfettered by an American “partner,” China could execute BRI in accordance with Xi’s vision, even as it assimilates “local and traditional forms, norms, and practices,” such as learning West African management styles and building social bonds with Central Asian elites. So, while American officials may still be animated by the post-9/11 philosophy “Either you are with us, or you are with the terrorists” – which is wearing thin after the disasters in Iraq, Libya, Syria, and Afghanistan – China can advance simply by being “not America” and showing respect for local partners by listening and learning.
Countries friendly to Washington, like Saudi Arabia, are realizing they have options. In June 2023, at the 10th Arab-China Business Conference Saudi Arabia oil minister, Prince Abdulaziz bin Salman, declared the kingdom will collaborate with China “and with everybody else” and will avoid “a zero-sum game.”
And to underline their point, the Saudis opened the business conference with the announcement of $10 billion worth of investment agreements with Chinese companies. There will be more announcements like this in the future as China is the biggest trade partner of the Arab countries. In 2022, the value of trade was 430 billion, up 31 percent from 2021.
U.S. Secretary of State Antony Blinken replied that Washington is not pushing Saudi Arabia to make a choice between the U.S. and China, but that “The United States remains the number one partner of choice for … most countries in the [Middle East] region” – a far cry from the with-us-or-against-us demand of 2001.In November 2022, the Minister for Foreign Affairs of Singapore, speaking on behalf of the Association of Southeast Asian Nations (ASEAN) about the U.S and China, declared, “We are not interested in dividing lines in Asia. Don’t make us choose. We will refuse to choose.”
John Kerry, now the U.S. Special Presidential Envoy for Climate, announced China has invited him to visit “in the near term” for talks on “averting a global climate change crisis.” Perhaps Chinese officials can then ask him why he apparently never broached Xi’s offer with Obama and will teach him how the Chinese say “repent at leisure.”
James Durso (@james_durso) is a regular commentator on foreign policy and national security matters. Mr. Durso served in the U.S. Navy for 20 years and has worked in Kuwait, Saudi Arabia, and Iraq.
Featured Photo: Mark of the Second Belt and Road Forum for International Cooperation BRF. The Belt and Road Initiative summit was held April 25-27, 2019 in Beijing.