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5/18/2016 ChinaisbuildingthemostextensiveglobalcommercialmilitaryempireinhistoryQuartz


China is building the most extensive global

commercial-military empire in history
Steve LeVine June 09, 2015

To the empire. (Reuters/Stringer)

In the 18th and 19th centuries, the sun famously never set on the British empire. A commanding navy
enforced its will, yet all would have been lost if it were not for ports, roads, and railroads. The
infrastructure that the British built everywhere they went embedded and enabled their power like bones
and veins in a body.

Great nations have done this since Rome paved 55,000 miles (89,000 km) of roads and aqueducts in
Europe. In the 19th and 20th centuries, Russia and the United States established their own imprint,
skewering and taming nearby territories with projects like the Trans-Siberian and the Trans-Continental

Now its the turn of the Chinese. Much has been made of Beijings resource grab in Africa and
elsewhere, its construction of militarized arti cial islands in the South China Sea and, most recently, its
new strategy to project naval power broadly in the open seas.

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Yet these pro les of an allegedly grasping and treacherous China tend to consider its ambitions in
disconnected pieces. What these pieces add up to is a whole latticework of infrastructure materializing
around the world. Combined with the ambitious activities of Chinese companies, they are quickly growing
into historys most extensive global commercial empire.

China views almost no place as uncontested. Chinese- nanced and -built dams, roads, railroads, natural
gas pipelines, ports, and airports are either in place or will be from Samoa to Rio de Janeiro, St. Petersburg
to Jakarta, Mombasa to Vanuatu, and from the Arctic to Antarctica. Many are built in service of current
and prospective mines, oil elds, and other businesses back to China, and at times to markets abroad.

But while this grand picture suggests a deliberate plan devised in Beijing, it also re ects an unbridled
commercial frenzy. Chinese companies are venturing out and doing deals lacking any particular order.
Mostly, theyre interested in nding growth abroad that is proving dif cult to manage at home. This, too,
is typical for a fast-growing power.

This is very much in line with what we would expect from other great powers whose military posture
follows its economic and diplomatic footprint, Lyle Morris, a China specialist with Rand, told Quartz.

Below are snapshots of components that are either already in place or on the way.

The story starts with a reimagined Silk Road

Map 1. The Silk Road economic belt and its maritime counterpart. (Reuters)

In September 2013, newly anointed Chinese leader Xi Jinping visited Kazakhstans capital, Astana. He was
in town to seal the Chinese purchase of a $5 billion stake in Kashagan, one of the worlds largest oil elds.
On that trip, he unveiled a plan ultimately dubbed One Belt, One Roada land-and-sea version of the
fabled East-West Silk Road trading route.

The idea is audacious in scope.

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On land, Beijing has in mind a high-speed rail network (map 2).

It will start in Kunming, the capital of Yunnan province, and
connect with Laos and on into Cambodia, Malaysia, Myanmar,
Singapore, Thailand and Vietnam.

Another overland network of roads, rail and energy pipelines will

begin in Xian in central China and head west as far as Belgium
(see dotted brown line above). As weve written previously,
Beijing has already initiated an 8,011-mile cargo rail route
between the Chinese city of Yiwu and Madrid, Spain. Finally,
another 1,125-mile-long bullet train will start in Kashgar and
punch south through Pakistan to the Arabian Sea port of Gwadur.
The thinking behind this rail-driven plan isnt newas we have
written previously, Beijing has been piecing it together for
Map 2. The Kunming-Singapore rail link.
(Classical Geographer/Wikimedia Commons)
At sea, a companion 21st-century Maritime Silk Road (see dotted
blue line in map 1) would connect the South China Sea, and the
Indian and South Paci c oceans. China would begin to protect its own sea lanes as well. On May 26 it
disclosed a strategy for expanding its navy into a eet that not only hugs its own shores, but can wander
the open ocean.

China does not need to build all of these thousands of miles of railroads and other facilities. Much of the
infrastructure already exists; where it does, the trick is to link it all together.

Everywhere, new public works will be required. And to make its vision materialize, Beijing must be careful
to be seen as generously sharing the big engineering and construction projects. Up to now, such contracts
have been treated as rare, big pro t opportunities for state-owned Chinese industrial units. These include
the China Railway Group, whose already-in ated share prices have often gone up each time another piece
of the overseas empire has fallen into place. If local infrastructure companies are excluded from the
largesse, there will be push-back on almost every continent.

In any case, not all this will necessarily happen. In a recent note to clients, China observer Jonathan
Fenby of the research rm Trusted Sources suggested that it may all be too ambitious. China has had a
history of announcing and then shelving projects, such as a $3.7 billion railway canceled by Mexico in
February amid allegations of local nepotism. Meanwhile, Japan has begun to challenge Chinese plans. It
has launched rival bids for billion-dollar high-speed rail and other projects in Indonesia, Thailand and
elsewhere, with relatively low-interest loans and sometimes better technology (paywall).

But Beijing seems to recognize its own limits. Rather, the world may help to build at least some of the
infrastructure through another Chinese creationthe Asian Infrastructure Investment Bank, with its 57
founding members, modeled loosely on the World Bank. Projects backed by the bank are meant to be good
for the country where they are built. But given Chinas outsize in uence in the institution, they are
certain to include some that t into its grand scheme of global infrastructure.

extends into South America

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y project, which cuts through the Amazon rainforest. (Global Forest Watch)

Xi has pledged $250 billion in investment in South America over the next 10 years. The centerpiece is a
$10 billion, 3,300-mile, high-speed railroad (dotted red line above) that would start in Acu, near Rio de
Janeiro, crossing the Amazon rainforest and the Andes Mountains, and terminate on the Peruvian coast.
(NPRs Tom Ashbrook conducted an excellent hour-long program on the railroad.)

On top of that, theres an advanced proposal by Chinese billionaire Wang Jing to build a 170-mile-long,
$50 billion canal through Nicaragua.

and also across Africa

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(Kenya Railways Corporation)

In January, China agreed with the African Union to help build railroads (map 4), roads, and airports to link
all 54 African countries. These plans are already under way, including a $13 billion, 875-mile-long coastal
railroad in Nigeria; a $3.8 billion, 500-mile-long railroad connecting the Kenyan cities of Nairobi and
Mombasa; a $4 billion, 460-mile railway linking the Ethiopian cities of Addis Ababa and Djibouti; and a
$5.6 billion, 850-mile network of rail lines in Chad.

Then there are Chinas maritime ambitions. These envision modern ports in the Tanzanian capital, Dar es
Salaam; the Mozambican capital, Maputo; Libreville, Gabon; the Ghanaian city of Tema; and the
Senegalese capital, Dakar.

All these land and marine projects align with existing Chinese natural-resource investments on the
continent. For example, the China National Petroleum Corporation (CNPC) has large oil projects in Chad
and Mozambique, and Chinese manufacturers are fast setting up Ethiopian factories that rely on cheap
local labor.

The new Chinese empire is enveloping its neighbors

In addition to its planned high-speed rail network into Malaysia

and Singapore (map 2) and Laos (map 5) into southeast Asia (see
map 5 for Laotian portion), China plans a canal across the
Isthmus of Kra in Thailand, a deep-water container port and
industrial park in Kuantan, Malaysia, and a $511-million
expansion of Male airport in the Maldives.

and nations further aeld in the Pacic

Map 5: The China-Laos Railway (Radio Free


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Map 6: Chinese investments in the South Seas, by dollar amount (Lowly Institute)

China wants to dominate not only the South and East China seas, but far into the Paci c (map 6).
According to the Lowy Institute, transportation comprises by far the largest portion of $2.5 billion in
Chinese assistance and commercial credit to South Sea nations. Among the projects are:

Fiji: A $158 million hydroelectric plant and several sports complexes, including the 4,000-seat Vodafone
stadium in Suva.

Samoa: A $100 million hospital in Apia, a $40 million terminal and upgraded runway at Faleolo Airport,
and a $140 million wharf at Vaiusu.

Tonga: A $12 million government building to be called St. George Palace, and two small Chinese
turboprop aircraft for domestic routes aboard Real Tonga airlines. The aircraft deal has been controversial
because neither of the planes are certi ed for use in the West.

Vanuatu: Two more turboprops, this time for Air Vanuatu, and $60 million to build a Port Vila campus of
the University of the South Paci c and a Parliament House (both loans have been forgiven).

Pakistan is pivotal to Chinas Silk Road

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Map 7: The Pakistan-China rail link (Xinhua)

Why has China lavished $42 billion in infrastructure projects on Pakistan? The two have always been
allies. But China has a particular goal: It wants to contain Uighur separatists who have been fomenting
violence in the western province of Xinjiang. Some of these separatists have sanctuaries in Pakistan and
Afghanistan, and Beijing has pushed hard for both countries to hand over Uighurs living there.

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But sending goods through Pakistan (map 7) also helps China avoid the Malacca Strait (map 8). Much of
Beijings oil and other natural resources passes through this narrow, 500-mile-long stretch of sea between
Malaysia and Indonesia. China worries that, if its relations with Washington become truly hostile, the US
could theoretically blockade the strait and starve the country of its lifeblood resources. That is in large
part why Beijing is nancing a deep Arabian Sea port at Gwadur, and the 1,125-mile-long super-highway,
high-speed railway and oil-pipeline route to the Chinese city of Kashgar.

as is Central Asia

A last weld. (Reuters/Pavel Mikheyev)

Central Asia has been an almost exclusively Russian playground for almost two centuries. It still is when
it comes to pure muscle. But in matters of cash, China is fast moving in.

The relationship revolves around oil and natural gas. Turkmenistan supplies more than half of Chinas
imported gas. It gets there through three, 1,150-mile-long pipelines; a fourth pipeline is soon to begin
construction. China is the only foreign nation that Turkmenistan allows to drill for gas onshore, in
particular from Galkynysh, the second-largest gas eld in the world. Chinas $5 billion share of the
Kashagan oil eld in Kazakhstan is one of its largest oil stakes anywhere. Xi also has signed $15 billion in
gas and uranium deals in Uzbekistan.

and Russia

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Map 9: The ties that bind Russia to China. (Reuters)

Two years ago, Russia announced a pivot towards China. The centerpiece of the shift is two natural-gas
pipelines (the larger of the two is the dotted red line in map 9) through which a fth of Chinas gas
imports would ow. The deal had some snags, but they reportedly have been worked out, and construction
is to begin soon. In addition, China is to build a $242 billion, 4,300-mile high-speed railway from Beijing
to Moscow, a two-day trip compared with the current six-day Trans-Mongolian Express.

China is speeding up how fast goods get to Europe

Map 10: The Maritime Silk Road (China Daily)

The Maritime Silk Road (the solid blue line in map 10) will enter Europe through a $260 million Chinese-
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funded upgrade of the Greek port of Piraeus. From there, rail service will continue into the Balkans. Ships
from China will also make port in Lisbon, Portugal, and Duisburg, Germany. To take the network into the
heart of Europe, Beijing has agreed to nance a 250-mile bullet train, costing up to $3 billion, from
Belgrade to Budapest. Separately, Chinas new 8,011-mile cargo railroad from Yiwu to Madrid is taking
away business from far more time-consuming truck shipping.

and has piled into US real estate

(Real Capital Analytics)

For now, the Chinese web of infrastructure does not extend to the US. Instead, what has been built
elsewhere is serving as a jumping-off point to the gigantic US market. High-speed trains are only now
starting to be planned in the US, and Chinese rms are front-runners to win contracts, including a $1
billion contest for the San Francisco-to-Los Angeles route, expected to be worth $68 billion. Chinas CNR
Corp. is already providing 284 passenger cars worth $566 million to the Boston subway system.

Another big splash: the United States is Chinas favored destination for real estate investment (see chart
above). This has included commercial jewels such as New Yorks Waldorf Astoria ($1.95 billion to Angbang
Insurance) and the Chase Manhattan Plaza ($725 million to Fosun). But the bigger sums have been spent
in all-cash deals by wealthy Chinese for residential properties (pdf, page 12).

Last but not least, China has polar ambitions

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The Chinese icebreaker Snow Dragon. (Reuters/China Daily)

Though the closest Chinese territory gets to the Arctic Circle is a thousand miles away, China nonetheless
calls itself a near-Arctic state. Chinese oil company Cnooc has a majority share in Icelands Dreki oil
and natural gas eld, and Beijing established the Arctic Yellow River Station, a permanent research
facility on Norways Spitsbergen Island. In Antarctica, China has four research stations, structures that
allow nations to stake a claim to the continent. Plans for a fth station at a place called Inexpressible
Island are under way. It is positioning itself to move for the continents resources when a 1959 treaty
guaranteeing its wilderness status expires in 2048.

Some of the infrastructure China is creating around the world will align with Western economic interests.
But to the extent that it does, that will be inadvertent. Some of the most modern transportation
infrastructure going up not only in China, but around the developing world, is deliberately linked to
China. It is meant to make the global economy a friendly place for Chinese commerce.

That does not make Chinas ambitions necessarily menacing or pernicious. But it does make them China-
centric. Its worth remembering that this way of doing economic development is not a Chinese invention.
As Michael Pillsbury, author of The Hundred Year Marathon, tells Quartz, Chinas ambitions are rooted
in a erce sense of competitiveness which they claim they learned from the America of the 1800s.

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