CHINA’S ECONOMIC ENGAGEMENT AND PROTESTS IN THREE CONTINENTS

There have been protests in three countries located on three different continents in the past few weeks. The common thread tying these disparate protests is the presence of Chinese investments. 

For over a month, the Gwadar port city in Pakistan experienced large-scale protests with mass participation of men and women, indicating the prevalence of deep discontent in the populace.The protestors called for wide-ranging demands, including the provision of clean drinking water, better educational facilities, improved healthcare infrastructure, removal of unnecessary check-post, and easy cross border trade with Iran. In June, Dawn reported that the federal government’s decision to grant Chinese trawlers fishing rights in Gwadar had prompted protests from local fishermen. Therefore, it was not surprising that issues pertaining to fishing, such as easy access to the sea and restricting the fishing mafia figured in the protesters’ demands.

There is also deep anguish that locals are not getting employed in various projects implemented in the region. Reportedly, there is an opinion that the Chinese firms developing the port have deployed a large number of personnel from outside Gwadar. Therefore, protestors demanded better employment opportunities for the locals. On December 16, after more than a month of protests, the residents of Gwadar called off their sit-ins after the government reportedly accepted all demands. However, even though large scale infrastructure projects such as ports, airports and stadiums are getting operationalised in Gwadar, issues surrounding basic amenities such as drinking water haven’t received adequate attention.

These protests suggest that there is a lack of confidence that the China Pakistan Economic Corridor (CPEC) projects will deliver positive economic outcomes. As Maulana Hidayat, one of the protest movement leaders noted, “when the Gwadar port has brought no prosperity to those living in its vicinity, what good can it do for the people in the rest of the country?” 

Chinese investments in Africa have been under the scanner in the recent past. Towards the end of November, there were reports that China may soon take control of Entebbe International Airport in Uganda. Such speculation reportedly stemmed from a parliamentary probe report which noted that the provisions pertaining to a loan taken from China enable attachment of government assets. However, the Ugandan government officials and the Chinese Embassy in Uganda quickly refuted the allegations. Even before the controversy could subside, the financial commitments made by Beijing at the Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) generated further discussion. There were reports suggesting that China proposed reducing its investments in Africa. Sun Yun reflecting on the FOCAC deliberations noted that “the amount of financial commitment, the number of promised projects and opportunities, and the relatively thin content of the action items together illustrate China’s cutback of activities on the African continent.”

In a tragic development, towards the end of November, five Chinese nationals were kidnapped in the Democratic Republic of Congo (DRC). The kidnapping threw a spotlight on Chinese mining activities and their interactions with local authorities as well as populations. According to a South China Morning Post report, “in August, South Kivu authorities suspended the work of half a dozen Chinese-financed companies after residents accused them of mining for gold without permission wrecking the environment”. It is possible to argue that China is likely to run into a few law-and-order issues given the large-scale investments across the African continent.

However, as researchers from UNU-MERIT, Harvard University, and ETH Zurich argue, “regions [in Africa] hosting Chinese-led projects are more likely to experience protests”. They contend that “lack of transparency in loan conditions” makes “Chinese finance… prone to being used by local elites,” which may engender protests by locals.

Since the end of November, there have been ongoing protests in the Solomon Islands, in which large parts of the Chinatown District in the island’s capital Honiara has been subjected to arson and at least three people have been killed. The protests are directly related to Prime Minister Manasseh Sogavare’s decision in September 2019 to establish diplomatic relations with China instead of Taiwan. Around the same time, a few senior politicians had published a letter stating the long- term interests of the Islands “in terms of our development aspirations, as well as respect for democratic principles, human rights, the rule of law, human dignity, and mutual respect — lie with Taiwan, not the PRC [People’s Republic of China].” The interethnic tensions are also getting reflected in the foreign policy, with people from Malaita Island preferring to maintain a closer relationship with Taiwan and the United States. The protests led to Australia dispatching a contingent of police and military officers to improve the law and order situation in the Solomon Islands. Similar protests in Honiara had taken place in 2006 when rioters burned Chinese-owned businesses over allegations that Beijing had provided financial assistance to the then newly- elected prime minister.

In little over a month, Chinese investments and policies have generated protests in three different regions – in Asia, Africa, and Oceania. This has added to the numerous protests against Chinese projects and activities in other regions such as Southeast Asia and the Pacific Islands (see table).

Some reports have referred to Beijing’s use of the ‘elite capture’ tactic – a process through which the elite in a country get a disproportionately large share in the emerging economic and infrastructural initiatives – to make rapid economic inroads in various countries. The developments in the past few weeks have demonstrated that the elite capture tactic may be encountering popular resistance.

These protests also highlight the limitations of China’s Belt and Road Initiative and external economic engagement strategies. There is an opinion that China often seeks to operationalise big-ticket projects without reference to local HDI, amenities and responsiveness of local governance frameworks to basic needs. The absence of revenue generation with positive spillovers for the local economy engenders negative perceptions regarding Chinese economic engagement. If China’s economy does not register a quick economic recovery from the after-effects of COVID-19, it is possible that Beijing’s investments in areas where it encounters resistance may experience a downward trend in the longer term. Such a development may open up greater space for democratic countries to indulge in healthy economic interactions.

(The article first appeared originally in The Economic Times)