Dirty Harry Should Counsel China
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If Clint Eastwood were an adviser to President Xi Jinping of China, he might quote himself as Inspector “Dirty Harry” Callahan in Magnum Force: “A man’s got to know his limitations.”

China is now learning the hard way that the pursuit of global hegemony has its limits. The country’s Belt and Road initiative is a massive infrastructural development plan announced by President Xi Jinping in 2013. China envisions expenditures of about $150 billion per year, committing nearly $1 trillion for ports, bridges, pipelines, and railway systems to link Europe, Eurasia, North and East Africa, and South and Southeast Asia to China. About 70 countries have signed up. The main Chinese objective is to establish China as the commander in chief of an economic model that is an alternative to democratic capitalism. Not surprisingly, Chinese contractors will benefit mightily and China may achieve better investment yields than on its U.S. treasuries — if all goes well with investment projections. Through its size and intimidation tactics, China will also be able to cut favorable terms of trade for itself. Further, the state of development in western China would be enhanced.

An integral part of this initiative is the China-Pakistan Economic Corridor which brings Pakistan squarely into the orbit of China, at a time when U.S. aid has been further cut by the Trump administration to only $345 million for fiscal 2018. A Chinese commitment of $62 billion is envisioned to support the Corridor, which showcases the port of Gwadar built by and leased to China, situated about 375 miles from the strategic Strait of Hormuz. Earlier Chinese aid was committed to the Karakoram Highway, and Pakistan produces its main battle tank, the Al-Khalid in a joint venture with the Chinese, who have also partnered to develop Pakistan’s JF-17 multi-role combat aircraft.

But all is not well for Chinese Belt and Road planners. First, they have discovered that Pakistan is a bad credit risk. As recently reported on July 23 in the Wall Street Journal, Pakistan is already in arrears on payments to China for electricity, which is a major component of the Corridor in Pakistan. Not only that, the Journal reports that an IMF bailout of highly indebted Pakistan is anticipated to come this fall. Fundamentally a western solution for Pakistan’s financial indulgence, an IMF intervention would show Beijing that it was guilty of poor business judgment and overextension of itself. Further, IMF engagement of Pakistan would require more transparency and better governance, something that the Pakistani opposition is demanding on the eve of the July 25th general election there, with accusations of extensive corruption.

A second factor is regional security: Central Asia has a confluence of Al-Qaeda, Taliban, and ISIS elements. Pakistan’s particular inability to control and contain jihadists would not sit well in Beijing. In view of the disaffected minority Uyghur population in western China that is Muslim and of Turkic ethnicity, China has a stake in suppression of Islamist dissidents.

Once a staunch U.S. Cold War ally and partner against the Soviets in Afghanistan, Pakistan is now in the embrace of China. America’s partnership with Pakistan’s archenemy India, based on strategic alignment to counter China, suppress Islamist jihad, and benefit from trade and investment, is certainly part of the story. The irony is that it is rare to meet Pakistanis who want to study or work in China.

Historians will debate how America and Pakistan lost each other. Pakistan’s double game — doing just enough to receive continuing military and civilian aid from the U.S. but not enough to defeat the principally Pashtun jihadists — is probably its biggest mistake. And the memory of Osama bin Laden hiding in his compound in the garrison town of Abbottabad, home of the elite Pakistan Military Academy, is indelibly etched in the psyche of Congress and the American people. America’s biggest mistake was probably to view Pakistan solely through the prism of national security as so-called AfPak.

Pakistan is not the only problematic country for the Belt and Road initiative. As also reported by the Journal, China’s second largest recipient of largesse, Malaysia, has suspended a $20 billion railway project and possibly others. And Sri Lanka has been unable to pay China for construction of a port in Hambantota.

China is a newcomer to the world stage as a benefactor of foreign assistance, with much to learn about political and operating risk within its client states. A viewing of the five Dirty Harry films by senior members of the Politburo just might make their day.

Frank Schell is a business strategy consultant and former senior vice president of the First National Bank of Chicago. He is a Lecturer at the Harris School of Public Policy, University of Chicago and a contributor of opinion pieces to various journals.

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