Rivers of Iron: Railroads and Chinese Power in Southeast Asia | David Lampton

[Music] great well we seem to have reached critical mass well good afternoon everybody uh it's a beautiful fall afternoon here in new york city um i am thrilled to have mike lampton here for a few reasons one is the main reason for the his being here today which is to talk about the book rivers of iron the other is to thank mike for all he has done for the national committee and for me in my career they're a very few people in my life where i would say but for what they did i wouldn't be who i am and wouldn't be able to do what i do and mike lampton falls into that very small group his presidency of the national committee ten years before i became president he stopped being president but laid the foundation for creating an organization that is able to play this critical role in the u.s china relationship i mean mike's bio goes is way too long to recite but his availability to all of us at the committee you know he has been a mentor to me from the day one in fact i would say from before day one as one of the great scholars on u.s china relations and on china's politics has been a mentor to me and a mentor to so many at the committee so mike this today's program is for two reasons one is for the book the other is just a huge thank you for everything that you've done for us over so so many years and for the time you spent as president of the committee this book is it's you know today there is so much heat and so little light on so many aspects of china and so many aspects of the u.s china relationship what mike's book does is it focuses us on bri the belt road initiative by focusing on a very specific initiative which is the high speed and what i would call moderate speed rail connection between south china and southeast asia and he does it through compilation of data through numerous interviews and brings to clarifies really what's going on so in this time when there's so much heat and no light mike has as he always done as he's always done shed light on it i mean needless to say as he points out in the book if this endeavor is successful it will change the face of that part of the world and create connectivity physical connectivity that was dreamed of by the colonial powers in southeast asia way back when and by prior leaders in southeast asia so he makes us think about it not entirely as a china initiative but what we'll do today is mike will talk about the book for around 15 minutes i've shortened my 15-minute introduction of mike which would be too fulsome um so he'll talk about the book i'll ask some questions and then i invite the audience to use our q a function and type some questions in and if you do please identify who you are and your affiliation since it will give us a better way to think about the question but mike thank you thank you for the book thank you for all you've done and welcome to our webinar well thank thank you steve and for the invitation and the generous excessively generous words but i also want to thank margo landman for all the work that goes in behind the scenes on all such projects including uh this project so i want to make that clear that i'm appreciative of everybody at the committee for their efforts um let me also make clear i'm the one doing the talking here but this book was written by three people uh celina hoe at the national university of singapore's liguanu school and chongqi kwik at the national university of malaysia and this is a genuine equal partnership in writing and research and indeed i suppose one dis message in passing is a project that covers as this does eight countries directly uh and then indonesia as the ninth came in in an important ways would have been inconceivable i believe to be balanced and uh informative if only one person wrote it it's just too of the span of cultures political systems history uh too divergent i think for anyone to fully grasp so this genuinely is a joint effort and my colleagues are sometimes we make presentations together and sometimes we do them individually but that does not subtract from the truly joint character of this this book is really about the implementation of a vision many books are written about projects and you you have a decision to build a project you build the project and you trace all the problems and sometimes successes along the way this is really a little different than that literature in as much as it's talking about the uh the development of a vision and then the incremental uh application of that vision across eight countries and it's it's concerns itself with the development of the vision development of the technology to realize the vision uh development of the uh negotiations that allow construction to begin and then all of the problems that i hear when you begin to build a project so we we sort of had a broad vision or there is a broad vision of where this interconnected rail system will go but in the very process of building it and negotiating it the future steps in a very long process may well be changed or evolved problems come along and so how this ends up is not fully knowable uh now so that's sort of the architecture now i asked the committee to have a map here that'll just show that vision so this is just rudimentary and uh uh it's just it's the broad uh design you will see the uh that the the hub in the north is kuen ming and quin ming of course hooks to the 29 000 kilometers of high-speed rail in china so this is really a project to connect china and its high-speed and conventional speed uh rails uh to southeast asia and uh quin ming is the hub and of course china has politics so it's probably an interesting question why quin ming and not some other city but in any case it's quin ming and there are basically three trunk lines here one goes to the west mandalay and myanmar down to rangoon and then over to chicago to bangkok if you look at the central line quinming sort of straight north south you go to through laos to enchant then down to bangkok and then if you look uh over on the east side you've got a line that goes through most of vietnam hanoi uh down to ho chi minh city through phnom penh to bangkok and so what you see is this vision to the point of bangkok puts bangkok in the position sort of like chicago was in the american transportation system a hub for north south east west maritime communications and so the ties have a very big stake in this and it's it's as much their vision uh as anybody else's now all three of these lines hook up in bangkok and then they shoot down the melee peninsula through malaysia and then on to singapore which has obviously a crucial but very small uh uh mileage in the whole system so the question that the book preoccupies itself with was where did this vision come what are the problems they're encountering as they negotiate because you can't negotiate the whole line with all seven uh transit countries at the same time so it's about how it was the vision was formulated how it was negotiated and now part of it is under construction and just today i believe foreign minister wang is in thailand to sign a an agreement that bears on about half the mileage uh between the laos and uh bangkok so in any case this is the story about how this came to be a vision whose initiative it was what are the problems encountered and what does it mean when this or some substantial portion of it is built what does it mean for development what does it mean for geos geoeconomics in the region and indeed the world and what does it mean in terms of military power projection and so forth there's a big argument about whether this is primarily strategically meaning militarily motivated or economically i would say the driver is principally economics but as china gets more interests and workers and factories and investment and infrastructure of course it wants to protect all of that and so the military if it isn't leading will certainly follow so i've always resisted calling this an economic project or a military project as the chinese say one hand washes the other now um the second thing i want to just say a word about is the project itself i grew up in terms of my research interests in the 1960s and 1970s and what was so exciting about the field was it was comparative it tried to generalize across countries it tried to make the point that you know culture matters history matters geography matters and so uh this i it's been i i've loved all my projects but this one uh is really has a special place in my heart because it gets back to what where i was interested in the field and that is you know how does china interact with the environment around it and the question of how do small countries have any leverage when they're dealing with china and the answer to that question i believe is yes now laos has less than thailand or malaysia or indonesia and maybe sometimes even less than singapore but the point is uh that small countries have leverage and the book tries to explain who has more leverage than who with the chinese and why but we can't look at china as sort of making the rest of its periphery putty in its hands it's it's not that at all now the chapters are just quickly cutting through this uh it starts out with with history the first thing is in this world where we're all talking about xi jinping and he's like the motive force for everything and i certainly agree with much of that the fact of the matter is this was a well colonialist vision in a sense hooking up railroads to china so there's a vast history here that also includes japan as well as france and britain importantly so it talks a little about that also of course after world war ii and then this sort of liberation of colonies and semi-colonies around the world southeast asian countries particularly malaysia began to think about how they could connect to china and particularly after china went into reform it you know the idea of china is a market and a place you want to connect to i suppose fear to connect to uh that idea those ideas grew in the 1980s 1990s asian development bank played a big role in developing this vision and bankrolling some early studies uh so the point is that southeast asian rail is really a southeast asian and big power initiative before that and and xi jinping has jumped on the train you might say of the southeast asians and it just so happened that starting in the year 2000 china for its own reasons development reasons began to build a huge new industry so the next part of the book deals with how china built from the ground up this industry and it's a remarkable story it uh it it certainly can be called industrial policy squared it was a uh i would say manhattan scale undertaking and china bought a lot of technology initially from europe and japan uh china frankly stole a lot of technology reverse engineered it and then in many cases improved none uh and then once it had built out its system by 2013 and long rolls into xi jinping they say we've got an export industry here and they see it as dr developing exports that are world class sort of like the equivalent of boeing driving the american economy and having subcontractors in all 50 states china saw this industry along with civil nuclear power and several others as where they had some comparative advantage so it deals with this construction and convergence between a southeast asian vision and chinese capacity not to mention foreign exchange and its outward thrust and soft power and all of this another whole part of the book deals with debates in china this is controversial in china right now everybody's shutting up because xi jinping seems so dominant but there are very lively debates over the wisdom of a lot of what he's doing including this and uh there's a lively debate at ching hwa the book talks about with engineers and leaders some people think it's uh it's unwise why are we spending so much money sending uh exporting industry one and financing it and many of its projects aren't going to be financially sustainable why are we doing this so there's a whole aspect of what's the debate in china i think just one more and then i just really want to get the questions but one of the key questions is why do different southeast asian states respond differently to chinese overtures and i mean to sort of bracket it i would say the vietnamese are the most resistant and we can talk about why that might be they realize and the vietnamese are quite open and talking about it if they don't play ball with the chinese the chinese will just build the system around them and they will be in a relatively worse position so they feel they have to get involved in this connectivity system but they don't want to be dependent on the chinese and there's a lot of other thought that goes into this on the other end is the uh i would say the spectrum of receptivity is laos and uh that's where the title of the book rivers of iron comes from was a one of our first interviews we went from bangkok by land all the way to the chinese border and in the process went through laos and the first government official we talked to uh was a state planner transportation plan and he says you know laos has got a problem here yes we got the mekong river but it's not so navigable much of the year and all great civilizations and all economics economically successful countries have built by ports or on on navigable rivers and so on but we don't have that and we have to build our iron river we have to build a technological substitute i was very surprised at the the candor and he says you know we don't have any choice yes we got a big problem with debt on this thing but if we don't take the debt we're going to stay poor like we always have now and so that was a very straightforward anyway each one of these seven countries has its own story about why it's more or less resistant and certainly part of it has to do with the resources countries have i mean thailand and malaysia have a lot of options laos doesn't have or cambodia doesn't have uh and then finally it raises the so what question for america how do we relate to this this is going to change the face of urbanization uh change economic and human flows in a north-south direction uh and so how are we going to respond and of course i guess we all can see right now we're pretty preoccupied with ourselves and how we but how we respond to what i think is a very i would say intelligent program that the chinese have and i hope somebody will ask about what is the chinese vision here because i think there is a central vision that's being implemented by a very entrepreneurial system so you sort of have a uniformity of message but a lot of people trying to push their pet projects under the central uh mandate the belton road and so on so it's a mix of what i call industrial policy strategic vision and excessive almost entrepreneurship by both state enterprises provinces localities and also there are interest groups in each of these countries that want the chinese to invest they're trying to lure the chinese in so anyway i think we're in a kind of um excessively simple view about what china is doing in the world why it's doing it in the world and we're seeing threat where there is some but we certainly also have a lot of opportunities and i wish we'd kind of focus a little more on the opportunities is that enough steve that is perfect and you were exactly you said we said 15 minutes and 15 minutes to the minute it was you know why did you it's interesting you could you have written about an incredible number of subjects what brought you to this subject initially very briefly you know what kind of what struck you suddenly i'm gonna interview you know people in eight nine uh southeast eight southeast asian countries about this project and kind of create a book on this what brought you to this well lots of things but uh in my in my career i ideas come to me at the strange strangest times i guess i was reading i think it was the straits times of singapore on a trip and i saw this map essentially not quite as elaborate and accurate as the one i presented but essentially that map and i said well boy that's going to be an engineering job but what's going to be the politics the end the political engineering is going to be tougher than the physical engineering uh and so it was really seeing that map and just framing it as a political policy problem that's the the proximate answer to your question a longer answer is i've always been interested in infrastructure because infrastructure forces it particularly big infrastructure water infrastructure transportation electric power they all cross administrative boundaries and they force administrative boundaries to deal with each other which is politics and i've always resisted the idea that chinese politics is just about xi jinping or mao zedong or deng xiaoping because there's a whole the vast system isn't about those guys it's about meeting basic human needs and infrastructure i think is really uh crosses boundaries and there you see the system naked basically you see it without it but i just say one other thing and this appealed to me because my previous work on water conservancy was within china but now you know we used to write about policy formulation and implementation in china but what happens when you have a global vision or a big regional vision suddenly your units of analysis are outside your political outside one political system cultures history so i thought this was in a sense very consistent with my interests about how i looked at chinese politics internally but now carried to globalization and then finally there was a final thing i could see china was becoming less successful and life is a kind of there's a lot there's a crapshoot and uh luckily i decided when i did this to interview in china first i think if i had deferred that and waited for the five years it took the project to finish and then china last i might not have had the access i had early on so i i globalization is the answer yeah kind of a two-part question obviously the book ends you know a bunch of months ago um what has happened in the period since you stopped writing and the book then moved to publication so that's one part of the question the other is take us out 10 years is this going to get built is that math that you showed us going to be a combination of high-speed rail and other uh and other rail that's going to really change the face of southeast asia is it going to work or is the opposition whether it's in the southeast asian countries whether it's in china you know as the debt problem grows are you going to get increasing resistance to funding this well uh of course truth in advertising requires me to obliges me to say i can't be sure and i indeed don't know but i have a significant level of confidence in what i'm going to say first part of your question was really well what's happened since the book was done and it it does go very superficially up through the the beginning of the cove epidemic where you could see that's going to be a big global issue but that was added i think at page groups so uh the book is really i think pretty exhaustive up through 2018. uh since then well as i mentioned uh wong e i believe today and tomorrow are in in bangkok to sign what has been a long negotiation with the ties on a big stretch a railroad from bangkok north to a a place called rachel sema sometimes called karat and then there'll be another segment that goes from that up the northeast to the uh to the lao border at noon kai that has not been agreed to so wangy is agreeing to i would say roughly speaking about one-third of the potential mileage in taiwan in thailand uh there's also the mileage south of bangkok that goes to the malaysian border that is uh in some degree of instability and that political instability does call into question when that link to malaysia would be built but i believe to answer your question i will be surprised if you don't have the railroad from all the way from queen ming to bangkok the central line to bangkok uh certainly it'd be i think conservative in my mind by 2030 and probably before that but so i'm pretty high confidence central line bangkok to kuan ming will be there just like the transcontinental railroad and by the way last year was the 150th anniversary of the building or completion of the transcontinental and i think americans should remember what that railroad you getting your question of what the transformation will be remember what a difference it made to the projection of american economic and military power in the pacific but anyway they will start like the transcontinental railroad in singapore and go up to kuala lumpur and that would have probably already started except mahathir got elected instead of najib in the last election in may of 2018. and so this my head here came in and renegotiated the deal and so i think i believe and it's they've agreed i guess now to solicit bids from singapore to kuala lumpur and i believe that'll probably be in existence let's just say by 2030 if not earlier and so that leads mileage to complete the central line from kuala lumpur to bangkok that i'm not quite sure when is going to get built but the whole every link you add adds value i mean if you have railroad built from two ends and there's that territory in between you've got a big value added when you complete the link so i think each length that's build increases the pressure to build out the rest of the system the then then other question is well once they've gotten going on this central line and you can see the end in sight who's going to go first vietnam on the east side or myanmar on the east and what will the chinese do there i'm less certain and i suppose we're talking off decades but i guess the answer to just finish off your question was so what's the transformational result that central line goes right down the spine of southeast asia and uh i think it's going to orient the flow of human uh intellectual economic resources north south and you just ask well so what does this mean for america and our friends allies us australia japan korea and that i think our strategy should be what i would call balanced connectivity let's help connect southeast asia up in an east-west direction not to contain china but to balance its influence and give the us and our allies we've got heck of an industry if we want to compete so maybe we're gonna have to build consortia maybe we're gonna have to get the world bank and asian development bank back into the infrastructure business but there's a lot we can do and it need not be framed as just opposing china but creating a balance of things what kinds of things mike i'm sorry what you said we should be participating in infrastructure development in southeast asia we the united states with the japanese the aussies and a variety of other friendly countries to do what well i i was speaking of of railroads but you could certainly think of power grids you can certainly think of that with japanese technology to build other rails in southeast asia sure the japanese are more expensive than the chinese and they tend to want to you know have turnkey operations and the chinese will kind of be a little more liberal in negotiating how you wish to negotiate implement these projects but i guess what i'm trying to say is if we were a frame of mind for the last 20 years we have not we in our development policy our policy towards the world bank our own aid policies have opposed big infrastructure because of the human cost displacement environment all of those things but you know for better or worse the chinese are emphasizing infrastructure and and and people in southeast asia are pretty well unified in the idea that they want more infrastructure so i think our the basic policy decision is are we going to get into that game and uh i have spoken to american officials uh and you know in 2018 we just passed an act called the build act which was the first really not too significant i think it's 115 million appropriation for infrastructure in asia in asia but the point is we don't have to do everything ourselves we can work multilaterally uh we can begin to put our resources where we can we can push our companies more uh i think you know do we know what the return on investment on the chinese in in the in this rail system is going to be uh answer no because first of all a lot of prices that china has you know you have to start debating what what is the true cost of what they're costing uh also there are all sorts of collateral deals there are a lot of corruption and so forth but i think the way i would tackle your question you know return on investment is you have to define what you think the benefits are if benefits is just the revenue that comes in through ticket and freight rates if that's your revenue then probably none of this will make very much sense or at least a lot of it won't as i was telling you earlier only two high-speed lines in china now are making money defined as in a sense ticket sales versus uh true costs uh but you if you have a broader vision as i think the chinese do and many others do well how do you cost all the carbon that's not built uh burned for gasoline to build and building cars and highways because you have more let's say coal efficient equivalent ways of moving people how do you cost in the cities that now can be built along the pathways how do you count all you know you can look at it as displaced peasants that's one way or you can look at it as new urban dwellers that have fire value added now this isn't just an economic question it's a value but there's no analysis there's no analysis of of ticket prices of giving real estate in areas which were previously undeveloped when you build a high-speed rail station there the land becomes incredibly valuable in the neighboring areas so there's no analysis of that when when i had the opportunity to work with the japanese on building the eastern harbor crossing in hong kong we built a tunnel with not one penny of hong kong government money and not one penny of corruption we were able to financing it by by predicting what the tolls were going to be analyzing how many cars and trucks would be going through the tunnel and when that was not sufficient what we negotiated with the government and they put the mtr so the subway went through that tunnel so what we negotiated for is on the hong kong side in the kowloon side we got real estate development rights at the first where the tunnel came out in both places because that that became incredibly valuable and that added value made the project viable so it was something but our analysis was i mean we spent millions and millions tens of millions of dollars doing that analysis which we gave to the hong kong government which was then still uh a british colony and i it actually taught me one thing about hong kong it was the most efficient honest government i had ever dealt with in my life it was it was remarkably remarkably um responsive to what we won the result was we did it in three years from start to finish right but but hong kong and i was there in the early 70s when empty the metro started that's an outlier i remember hearing years and decades ago with hong kong's the only place in the world where you can build infrastructure and it actually is a gold mine right i mean but you get on the ground and you start walking and driving from bangkok to the china border and you're not going and also you don't have the shenzhen dynamic that build up and and so on i mean it's really one city uh now up to guangzhou so i think that's an outlier the example that is more appropriate i think for the question you answer is look at the big dig uh uh i'll say underground in in boston and i what it took two or three times as long to build as they thought and it was i think initially costed out at 3 billion and came in at what 12 to 14 billion i mean it was a nightmare and then they opened it up and part of it collapsed on a car going through it some lady got and they closed it down for a year so i i don't want to sit i i think china is going to often be better than the big dig maybe but uh i think hong kong is an outlier yes there have been studies on expected revenues and they've also the chinese have negotiated hard to get development rights we'll make loans to you or maybe even some you know low interest rate loans but you've got to give us an exchange one of two things development rights along the railroad and countries like thailand and even laos resisted that or you've got to give us side deals where if you default on the loan we get a banana plantation or whatever it is so yes there have been studies but this is not homecoming the um we've got a host of great questions coming in so let me i've got also a dozen other questions so let me just ask my final question then we'll go to the questions that have been that have been posted um talk about the security implications of rail why are there actually security implications for rail if there were a kinetic event between china and vietnam they're not going to be able to send people into vietnam on these rail lines they'd be blown up in 10 seconds so explain the security implications and why we should if you think so be worried about well i think we should be mindful of them i don't think you heard me say worried although there are certain regards i could be worried but the first of all i think you have to define what how are you defining security and many of these countries actually are more i don't want to say more well i would say more concerned about their economic security i mean these trains are going to move chinese entrepreneurs and tourists and chinese people in and they buy land and who owns land in these countries is an issue the more accessible you make it the value that land goes up you know a lot of land transactions in these countries now in cambodia the chinese are buying up all sorts of land in anticipation that it's going to be more commercially viable in in a significantly short period of time so certainly these countries when they think about their security they're thinking about their rights of innocence sovereignty and their their capacity to shape their own economic destiny so i mean that's one thing secondly uh all of these rails in the end have a connection to the major ports and harbors and the chinese think about security they still talk about this malacca dilemma and the independent they worry about the indian navy and southeast asian waters or south asian waters and they worry about the us navy and japan in its other waters and so they're self-consciously trying to diversify their uh modes of transportation to be less dependent on and you can see how worried they are about maritime because china's emphasizing the the navy to such an extent so i think it's part of a transportation diversification strategy but the other thing is as the as china builds out the you could take malaysia for example the political leadership in malaysia under najib became highly dependent on chinese corrupt money to put it bluntly and in fact he was voted out in may 2018 precisely because in the view of many he'd sold out malaysia's a part of malaysia's future to china and developers for the big rail station and huge development there in fact there's several developments going on in malaysia and so there is almost there can become the issue of political determination self-determination as a security issue so i would say diversification and of course once you build up big ports and so forth the chinese are going to have bigger maritime fleet they're going to have a bigger navy to protect it i mean the more you put down at a place the more you have a security interest in protecting it i think that's reasonable it's certainly to be expected the u.s navy is not going to like it a security interest for the chinese in particular i would say everybody has interests yeah the chinese have security i would argue it makes the chinese vulnerable and doesn't have a serious uh security implication for the host country if the host country decides it doesn't want that opera that railroad to operate tomorrow whatever the investment is it starts the operation tomorrow right it actually creates a dependence of the chinese who will have lent the money so i would argue the interconnectivity actually creates a security vulnerability for china yeah not a security vulnerability for the eight southeast asian countries right you asked me though what the implications were you didn't say you know vulnerabilities and what i'm trying to say is there are implications for uh everybody yeah uh jim kelly over over at pac forum hi jim asks um a very interesting question have heard reports that china insists on a kind of sovereignty over the rail rights of way perhaps a hundred meter strip could you comment and then he says thanks for this thanks for the question jim uh yes well you've got seven southeast asian countries are the negotiating partners in separate negotiations uh and a sticking point has consistently been with the chinese they in effect because the the investment costs are so great on the hardware they want to compensate by getting flows through development you know a commercial development along the right away and this has become a big problem i would say particularly with thailand and that's one significance you know we don't always see these agreements in black and white in their full complexity but wong e is now as i mentioned twice in my remarks is in uh in thailand and a big sticking point for several years was what would be the width of the right-of-way and what commercial development would the chinese have under their control and of course the chinese wanted an absolutely huge right of way this gets to though and i i mentioned that these countries can depending on which country we're talking about more or less fight back thailand has what's called the thai state railway system and it had king rama i guess it was rama v if i remember his rain number uh but any case he was father of the railroads and early on he uh created a very big rail right away the whole length of thailand and so whereas indonesia you don't have any you've got to acquire all the land and you have all sorts of fights in thailand the state rail authority actually controls the land so you can uniformly negotiate with the chinese and the thai rail authority doesn't principally make money on its railroad tickets it makes money on land deals and development deals and the last thing they wanted to do was give all those rights to the chinese so ironically one of the bigger opponents of that chinese high-speed railroad was the thai railroad bureaucracy and so they chiseled down the chinese and so yes and and it was portrayed in thailand i think jim you mentioned sovereignty issue that was exactly how they and that's how the word that vietnamese use uh vietnamese will also tell you that a lot one of the projects the chinese were involved was such low quality it's just been a disaster and a safety problem too so uh anyway you're right but the point is these uh depending on which country you can talk about they can fight back and the thais have done a pretty good job in negotiating as one thai said we're like a beautiful woman we have many suitors we can afford to wait and um a similar question from cheryl brown at university of north carolina charlotte she says will each country have input in designing safety regulations of the railroad railway system will the railway system use radio frequency identification rfid well as to that particular technology well first of all as we said the whole system hasn't even been negotiated so i think probably the first thing to say is that has not been determined but this is a very important question because what you have is incremental negotiations you have the laos followed by the ties followed by the malaysians and the singaporeans so this is happening sequentially so each subsequent negotiation is going to have to take account of all the preceding decisions because obviously you don't want different safety standards in an interconnected you know very like they had in when joe an accident that killed a lot of people uh so you've got you've got sequential no negotiations each of which subsequent negotiation has to take into account what happened before uh so uh i think they they will have a standard safety system and if they don't this is really uh they would change your assessment of how wise this was but this gets to another aspect you know when you talk about implementation of a project you're not only talking about you know building the bridges getting the concrete hiring the laborers displacing the people and all of that but you're also talking about building software systems safety is not only a technical issue but it's training all the workers and so already laos and ties and are in china getting trained uh so you you're you're you have the problem of customs and immigration you want a high-speed system you want people moving through it you don't want to stop at every national border and have a conductor coming through checking everybody's passport so how do you handle that and we saw in hong kong when china wanted to put immigration and police officers in central hong kong you know the local population didn't think that was a terrific idea it happened but they didn't think it was a great idea so you raised the whole issue of how do you get a smoothly functioning system that's negotiated in countless negotiations among nine countries all of whom have different interests but i would think in terms of collision avoidance and traffic separation if you don't have a a standard safety system across these systems then that means that i would think it means is chinese standards are going to prevail because remember you're trying to hook into that 29 000 kilometers of high-speed rail that china already has and this just raises one very other important point your question raises and that is the issue of standards this isn't just about who builds a railroad or railroads it's partly about who standards for an industry are accepted that will then shape even if the japanese build equipment to go on the chinese system it's going to have to conform in some sense to chinese standards or vice versa so as china is moving the us isn't just it's just not a strategic problem not just a direct economic problem but it's who's shaping the standards that are going to guide development for the next you know 50 100 years aaron heluga at nyu u.s asia law institute asks about the labor issues uh in these projects are large numbers of chinese workers used on these projects and how do the host government uh house governments and local workers feel about that well i mentioned that we also talk about indonesia because in the sequence indonesia uh started building uh this this road to chicago uh a deal with the chinese that the japanese thought they're gonna win and so we we talk about indonesia even though it's not part of the map that i showed you and is obviously separated by water but in any case the worker issue is particularly in indonesia is a huge issue and in the book it has numbers on the numbers of chinese workers in indonesia and of course if you can remember back to 1965 of course and then in 1980s and 90s you had various anti-china incidents and big incidents violent incidents against chinese overseas chinese living so you can imagine when china's bringing in large numbers of workers for these projects not entirely welcome and that's a big problem and then in these negotiations they uh often uh the negotiations importantly deal with how many external workers or how much local employment you're gonna give how in thailand the issue of using thai engineers versus chinese engineers is a whole issue so this is a very complicated uh issue i would say and i wouldn't want to be misunderstood as endorsing this idea but one interview with the chinese um negotiator on these projects said you know what i won't mention the countries that he made reference to he says you know one chinese worker is worth five of another country's workers and ten of another country's workers and so the chinese view is the more non-chinese you get in there the more difficult becomes the sort of management of the workforce and so on of course the local country has exactly the opposite and so then the chinese get into negotiation well then we've got to train workers and and so forth so uh what i'm trying to say is that the chinese have a lot of problems and they're learning but each of these societies is a different learning experience and as they said one guy said to me you know it's pretty complicated dealing with democracies they keep changing their government and so forth i have to ask this question because unless if i have a high school class mate on this is from doubtlessly my oldest friend on this call howard spendlow who's a professor at georgetown university as a historian i would appreciate a few minutes on the following issue does any of the prc's current rhetoric on the bri invoke anything about the legacy of foreigners building railroads inside china pre-1949 and lauren sullivan at adelphi university asks it in slightly more specific terms he goes how does chinese yes how does chinese contemporary policy on building railroads abroad reflect their history where european powers particular germany were active in building china's original rail network well the the um early portion of this book deals a little with that but i i welcome those questions and wouldn't pretend to be uh an expert on all rail activity in the history of china but i did pay attention and i i thought what jonathan spence in search for modern china had to say was illuminating uh so and there are footnotes uh in the book that other sources particularly on the french activities in vietnam and southern china and so on so and there's a a very large literature on this so uh i'll claim to uh know the list part of the literature but it's much more extensive but to answer your question it's it's my impression that the child i don't think there was an interview and i had over uh we had over 158 interviews uh and i don't think a chinese person i ever talked to about railroad development ever mentioned european rail activity or that associated with the the the you know treaty ports and the uh colonial penetration of china and the 150 years of humiliation there's a rich literature on european rail activity in china but i don't think to the 99 certainty level that a chinese ever raised that and i you asked me to speculate i think it's in their view of something of which they're not particularly proud and yet they will talk about their new rail industry and by that they mean basically starting in about 1999 year 2000 manhattan scale project and they quite explicitly had a very uh entrepreneurial uh minister of railroads uh leo jun was his name uh and he basically made a deal with the europeans give us technology we'll pay it pay you for it and you'll get access to our market but you've got to transfor for this technology and you've got to give us the right to build our own brand and this is the rail technology and interaction with europe that the chinese talk them now to answer your question and i i saw a question for larry about the germans it wasn't and i might be wrong but the germans didn't seem like the most visible in in the colonial era uh railroad uh to me particularly in the area i'm talking about the french and the british were much more relevant and of course hong kong and the kowloon canton railroad and so on now it's true the germans gave the empress sushi uh a little railroad set that was i guess 1.2 kilometers to chug around in the forbidden city or in the imperial grounds and she didn't like it it upset the feng shui and so it went so i don't also the germans built some stuff in shandong where obviously they had their treaty port activity and so forth but i didn't get the sense that the germans were a particularly big player uh germans it seems to me were a bigger player along with the french and the canadians in this high-speed rail left secretary pompeo goes around the world warning every country about china's malign activities does this vra bri initiative constitute one of those malign activities that comes from mort holbrook former foreign service officer an old friend uh well any given project can be uh you know more or less environmentally catastrophic uh it can be more or less financially catastrophic and laos is at a lot more risk than i would say thailand is so i'm not trying to say there are no risks or some projects won't go pretty unfort in unfortunate directions but as an overall effort i think china is basically said as its growth slows we have to increase exports we have to increase the wealth of societies around us because middle class classes buy more than poor people buy and we've got to fuel our long-term growth by fostering development around us and that means urbanization it means moving lower value-added chains out of china and then going value-added and connecting our own value-added chains and i think that is a sound vision now execution's a big part of the story but i think that's astound vision and i think we're in a national mood of rejecting everything the chinese have to say now believe me i'm at the top of the line unhappy with a lot of things china's doing but you know this this is a vision you have to come to terms with and a point i make and we make continually in the book is this isn't just china foisting a vision on southeast asia these countries almost to the person leader agree with the proposition that to get rich build a road we've got the idea you've got to see the rate of return clearly you've got to be able to have a revenue flow that that makes sense in a reasonable amount of time the chinese and most of the leaders mahathir endorsed this book and we had a long set of talks with him and his view was this will force development it does a field of dreams kind of build it and they will come now maybe that'll prove true you know if we have a global recession or decoupling reached global proportions then this will have proved to have been a bad idea but as the dedication of the book says this is built to the proposition that the future was is with connectivity not walls yeah now that's a proposition not a certainty we're going to go over a couple of minutes because there are a couple of questions which i really would like to get to and and as you talk mike i'm reminded of the publicity in the west surrounding the commencement of the high-speed railway in china that if you read most of the mainstream media when china was beginning this it was a white elephant it was done solely for the corruption which it was engendering and you know it was turned out to be wrong that has fundamentally altered life in china it is truly extraordinary to be able to use that high-speed rail to get around china and i wonder if this is going to be the same robert daley asks when the network is completed who will manage it does chinese financing and construction mean that it will be a chinese system when it's up and running or will every country involved have agency well i i think the answer to that question will partly depend on well agreements that haven't been negotiated so answers not entirely but i would say there's in my uh estimation no chance this is going to be entirely managed by the chinese i mean just take the the far end example singapore you can't imagine right i mean just take that off the table for singapore now that's not too much mileage and the system could end if singapore didn't want to play ball so i think the answer in its extreme form is no that's not possible i think in the management of it you're going to have a period in laos where they have the least technical capacity engineering competence and the most financial dependence on china you're probably going to see a very large role and part of the negotiations which i haven't seen all of the agreements but i understand include training and over time sort of repatriating management to countries as their capabilities go up so uh no i don't think in the long run this will be entirely chinese managed and it will probably vary by country i think thailand already as i said the state rails authority in thailand is very powerful and i can't imagine them turning over management to china there may be some advisers and they're certainly already training in china but day-to-day operations no now i suppose part of the issue is going to be as you pass off a train going laos thailand malaysia part of the question is going to be i suppose who in each area is monitoring the throughput so do so to speak and how is immigration going to be handled and so on but i cannot imagine that this will could even conceivably be negotiated much less work if if there was any possibility the chinese want to manage everything one final question from anu anwar at harvard asia center do you think and this kind of gets i want to ask it because it gets to the theme of the book do you think the bri infrastructure connectivity projects in southeast asia will reshape the geopolitical landscape in china's favor yes but it's not first of all two things are uncertain yes the direction will be that direction because as i said they share a vision with these countries that you know build a road and you'll get rich and the u.s for a combination of our own domestic preoccupations and the west and uh also our financial capability and also how do you explain helping you know build railroads in asia when we we have a hard time getting from washington to new york you know on a train that's reliable so uh yes i think the resources that china is willing to provide to meet a felt need of these countries undoubtedly gives them influence i mean how could it be otherwise but the chinese do many things that make people less cooperative than just that equation would suggest like i said workers how much employment are you willing to give what interest rate are you willing to get and as china sees white as unsuccessful projects elsewhere that it's been involved in it's increasing its political risk assessment and its financial risk assessment and talking about how you provide security so china does a lot of things and makes demands on these countries they don't like and they also wish that we meaning the west or japan canada south korea a lot of candidates here if you i can't tell you even in cambodia that's supposed to be in china's pocket people said you blame us for being too responsive to china but you won't help us indeed you're putting sanctions on us for for obvious and severe human rights problems i'm not criticizing the u.s decision i'm just saying from those that point of view where economic development is a higher priority for them china's speaking more to their highest priority and they don't see a lot of uh compensating opportunities even the vietnamese said you know we want to be less dependent on china but what who else is going to be there so you know i that's what i mean if we we don't want to see an overly beholden region that's growing in economic importance for the world then we've got to have something to offer and you know a lot of times we're just talk that is a great note to end on i've gone way over uh which is not national committee uh style um and i noticed there a lot of friends of the committee who have additional questions which i have not been able to reach i'm very sorry but if the staff can note those questions and forward them on to mike if that's possible to do that would be terrific uh because there are a lot of good friends of the committee and a lot of great questions that are remaining out there but mike i can't thank you enough we have posted the link how to buy the book so if it's a wonderful read if if you love trains you're interested in southeast asia and how china is projecting it's ab it's protecting its power there uh it's an absolute uh must read and again as as mike has noted i haven't seen many books that are endorsed by um prime minister mahathir so even in his in his mid 90s he still takes the time to endorse these books but it's it's great um and he says rivers of iron provides insights on a central issue of our time dot dot dot but it's it's terrific um but mike thank you so much and i see the audience has stayed with us the whole time so we should have allotted a longer period but it's great to have been able to do this thanks and i'm appreciative to everybody thanks everybody you

Channel: National Committee on U.S.-China Relations

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Id: B61rov4Q71A

Length: 67min 3sec (4023 seconds)

Published: Thu Oct 22 2020