#China investment plan brings opportunities along with risks


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Chinese President Xi Jinping first unveiled the massive Belt and Road Initiative in 2013. Since then, Beijing has pledged nearly a trillion dollars for investment dozens of countries from the Indo Pacific across the Eurasian landmass.

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As American policymakers continue to work out the best way to counter this plan, they must keep a sharp eye on Eastern Europe, Djibouti, and Kazakhstan, the “buckle” of the initiative.

The tiny African republic of Djibouti is plagued with political and economic corruption. Djibouti President Ismail Omar Guelleh helped himself to a fourth five-year term in 2016 after parliament dubiously eliminated a constitutional two-term limit in 2010. His family and wider clan run all the few major sources of revenue in Djibouti.

Despite its economic and political problems, Djibouti has been courted by many outside powers, including the United States, which maintains a large base there due to its strategic location on the Horn of Africa. This combination of corruption and geopolitical importance makes Djibouti ripe for Chinese meddling.

As with most places located along the Belt and Road Initiative, Beijing has invested significantly in Djibouti infrastructure, cutting sweetheart deals that advance Chinese geopolitical interests at the expense of the sovereignty of the recipient country.

The corrupting influence of China is already being felt in Djibouti. Earlier this year, President Guelleh unilaterally ended the contract with DP World of Dubai, one of the biggest port operators in the world, and expropriated the Doraleh Container Terminal. Last month, the London Court of International Arbitration ruled the contract was valid and binding, but the Djibouti government has said it will ignore the ruling. On cue, Chinese companies with state support are lining up to replace DP World, ignoring all international business norms.

This development could hamper American military operations in the region. The commander of the United States forces in Africa, General Thomas Waldhauser, has said that if China placed restrictions on the port, it could inhibit resupplying the American base there and the ability of Navy ships to refuel in Djibouti, which seems happy to let China do as it pleases, as long as it keeps paying. Chinese engagement through the Belt and Road Initiative in Europe has been focused on the east, where the need for investment in aging infrastructure is most severe.

In 2012, China launched the 16+1 Initiative seeking to build inroads with 16 eastern European countries. Beijing even established a secretariat in the Ministry of Foreign Affairs to oversee the initiative.

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