Strategic Imperative or Commercial Opportunism? Examining China’s Belt and Road Initiative in the Red Sea Corridor

Abstract

Abstract: In 2013, President Xi Jinping of the People’s Republic of China announced what would coalesce into what is now known as the “Belt and Road Initiative” (BRI). Analyses of the BRI often focus on the geopolitical implications for the Chinese infrastructure development projects across Europe, Asia, and, as will be discussed in three case studies, Africa. Discussions of geostrategic motives as the sole or primary drivers of the BRI—which posit the Initiative as a “grand strategy”—overlook centrality of commercial interests in projects that come to fruition under the BRI label. This thesis relies on both theoretical constructions of the Belt and Road and evidence from case studies. First, I describe the Chinese actors within the BRI, seeking to simplify the highly complex and ambiguous decision-making process of BRI project approval. The ambiguity of approval processes and the degree of autonomy afforded to SOEs through corporate governance structures has fueled debate about how BRI should be received in international policymaking, financing, and commercial circles. Proponents of “grand strategy” theses purport to describe the BRI as a proactive, coherent set of policies and directives for SOEs to execute. On one other side, a nascent but growing body of literature describes the BRI as reactive, highlighting bureaucratic fragmentation and unformed coordinating mechanisms as evidence for the inability of the CCP to actually form, not to mention pursue, a grand strategy. Chapter 1 reviews this debate, and makes a theoretical judgement of the BRI as a “policy envelope”: SOEs propose overseas projects they expect to be profitable, even if gaining approval from CCP officials requires investment pitches claiming to advance China’s geostrategic interests. In Chapter 2, I explore projects in detail that are in progress or have been completed in three case study countries—Egypt, Ethiopia, and Djibouti. In Chapter 3, using an analytical process trace, I asses the projects’ potential values to China through social, commercial, and geostrategic lenses. I conclude that, for nearly all projects, perception of project’s potential to produce at least moderate commercial value functions across cases as a causal mechanism for project actualization, and that perceived geostrategic value did not emerge consistently as a determinant of project actualization.