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27 September 2018

Where money goes, people follow. As Beijing moves to secure a growing Chinese diaspora throughout the Indo-Pacific, what may start as gated communities could end as de facto colonies, David Brewster writes.

If we thought that the colonial era was more or less over, we may need to think again. Countries of the Indo-Pacific should start taking seriously the possibility of China becoming a new type of colonial power in the region.

Decades of fiercely anti-imperialist rhetoric in China might seem to make the country an unlikely candidate for a neo-colonial power. Nevertheless, we could soon see ‘colonialism with Chinese characteristics’.

In recent weeks, Malaysian Prime Minister Mahathir Bin Mohamad pushed back against China’s Belt and Road Initiative (BRI), ringing alarm bells about what he called China’s ‘new colonialism’.

This shouldn’t be dismissed as just rhetoric. The sheer size of China’s economic footprint gives it obvious influence. But there are other ways that China’s presence and role can grow.

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One is through so-called ‘debt trap’ diplomacy – gaining influence over economically weak countries using indebtedness. Another is through gaining control over ‘strategic’ infrastructure. The acquisition of a 99-year lease over Hambantota Port in Sri Lanka in highly dubious circumstances is Exhibit A for this. It also has unfortunate echoes of Britain’s lease over the Port of Hong Kong more than a century before.

Yet perhaps China’s biggest long-term impact on the region may not be through debt or infrastructure, but through demography.

When Mahathir signalled concerns about the BRI, he not only cancelled Chinese infrastructure projects. He also effectively canned plans to build a new US $100 billion ‘Forest City’ for up to 700,000 residents on reclaimed land near Singapore. According to Mahathir, it was ‘built for foreigners, not built for Malaysians’. In effect, Mahathir saw Forest City as a Chinese city in Malaysia.

In fact, the growth of China’s economic role across the Indo-Pacific may be accompanied by a significant demographic shift that could become an important driver in China’s regional engagement.

As has been the case throughout history, big new flows of money tend to bring people along for the ride. There may already be more than one million recent Chinese economic migrants in Africa and around 250,000 Chinese nationals arrive in Pakistan each year.

But it is not just about a new (and perhaps relatively wealthy and powerful) diaspora, but also about the potential for ‘neo-colonies’.

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A good example is the Chinese-owned port of Gwadar in Pakistan, where a Chinese company has announced plans to build housing for up to 500,000 Chinese workers by 2022 or 2023. A company spokesman claimed that Gwadar would follow in the footsteps of the Chinese city of Shenzhen, whose population grew from 30,000 in 1980 to 11 million people in 2017. Of course, real estate developers like to think big. But for Chinese developers, a new city at Gwadar may be little different from the many new cities built across China in recent years.

Whatever the motivations, there is a real chance that what may start as ‘gated communities’ could become more like de facto colonies.

It might be natural for the newly arrived residents of Gwadar, for example, to want exemptions from local taxes (already agreed by Islamabad), to use Chinese instead of local currency (repeatedly demanded by Beijing, but so far resisted by Islamabad) and perhaps even to exclude locals as residents on security grounds. This last demand has been denied, although Beijing still wants a security fence around the city that would exclude anyone without a permit.

Of course, security is a big factor. Pakistani authorities will be nominally in charge at Gwadar, but as the numbers of Chinese nationals grow, Beijing will come under increasing pressure to protect them. Beijing’s preference will be to use local forces, including a special Pakistani security force of some 15,000 troops, as well as private security contractors. But last month’s attack on a busload of Chinese workers in Baluchistan indicates that this may not be enough.

Beijing may well feel obliged to take a direct security role if local forces can’t adequately protect Chinese nationals and investments. This may already be happening in northern Pakistan where Chinese security forces have been spotted in connection with Chinese infrastructure projects.

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China’s Marine Corps, which is being tripled in size to 100,000 troops, will likely play a leading role in protecting China’s regional interests. As the Global Times argued: “China has always adhered to the principle of non-interference in the internal affairs of other countries, but that doesn’t mean Beijing can turn a deaf ear to the demands of Chinese enterprises in protecting their overseas investments.”

A Marine Company is already based in Djibouti explicitly to help protect Chinese people and investments in Africa. There has been considerable speculation in the Chinese press about future marine deployments to Gwadar.

Gwadar is one example, but this may be occurring elsewhere in the region. The US $15 billion Colombo Port City currently being built in Sri Lanka will include at least 40,000 residents. Big new residential cities are also planned for the Chinese port of Bagamoyo (Tanzania) and the proposed iHavan port (Maldives). How many locals will be able to afford to live in these developments?

This is not to claim that Beijing has any plan to colonise the Indian Ocean. But real estate speculators tend to make their own plans. Britain famously collected its empire in a ‘fit of absent-mindedness’. Through the nineteenth century, the Union Jack followed British traders across the world in a series of small and incremental steps, each of which made perfect sense at the time.

Whatever Beijing’s intentions, the power of demography could become an ever more important driver in China’s security role across the Indo-Pacific.

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