In a recent column, I discussed how the United States needs to prioritize infrastructure investments on a global scale to underscore the importance of trade in diplomacy. My main emphasis was that Washington, D.C. is far slower at making project investments than its geopolitical rivals, especially in the sphere of maritime trade, which could become seriously detrimental to its foreign policy over the next couple of decades.
Among those detriments are the objectives of its greatest rival, China. In particular, Chinese efforts to orient the global trade networks around itself target key global choke points of congestion and blockage.
Global trade plays a crucial, if not the most important, role in China’s economic growth and foreign policy. From a historical viewpoint, China’s efforts to participate in the global market distinguished it from the Soviet Union, which sought to counter and defy the West as an ideological vanguard and military hegemony. China’s strategy to integrate itself into the world economy represents its understanding that greater connectivity with the world creates a more dynamic and prosperous economy — something the United States has failed to realize.
From a strategic perspective, new Chinese infrastructure initiatives focus on the most essential component of global trade: maritime trade and the power to control sea lanes. After all, China’s economy is very deeply connected to resource imports and the export of its manufactured goods by sea, which is the motivation driving China to capitalize on maritime trade.
Therefore, China’s next step in economic development is to become the hub of global trade. This geopolitical development would manifest as China exerting influence over key nations like Thailand, Panama or Malaysia for preferential treatment for the passage of its vessels and turning key maritime choke points into strategic strongholds for its military. Alternatively, China likely will seek new projects to build canals, creating new paths for its logistics network, which is a key reason behind the significance of these infrastructure projects.
Maritime trade is the indisputable foundation of the global economy, which is precisely where China is focusing most of its diplomatic energy. Because of this, proposals for the construction of new canals are among the most valuable aspects of Chinese foreign policy, as being able to dictate the flow of ships along trade routes is vital to maintaining a stable connection with global markets.
China’s ambitions to build canals correlate with its geopolitical interests. Among the many proposals created under the Belt and Road program, the two that promise the most advantage to China are the plans to dig canals across Nicaragua and Thailand. The proposal to dig a canal across Nicaragua is not without precedent, as China attempted and ultimately failed throughout the 2010s to secure concessions from Nicaragua for a canal project.
However, Nicaragua’s President Daniel Ortega recently spoke in favor of reviving the canal project this year, aiming to build ties with China against the United States’ sphere of influence in Latin America. In this sense, Nicaragua — and on a larger scale, Central America — can be seen as the staging ground for a new geopolitical power struggle between these two forces.
The Nicaraguan Canal is a bold attempt by the Chinese government to challenge the United States’ geopolitical power. If it goes into motion, this project can bypass the Panama Canal, simultaneously allowing China a more reliable passage for its ships, both civilian and military, while diminishing the United States’ dominance in the region. It is no coincidence in this context that the United States has begun exerting pressure on other countries in the region, like Panama, to discontinue their partnership with China as a countermeasure.
In addition to Latin America, China is also eying projects in Southeast Asia. The proposal to build a canal across the narrowest point of Thailand, between the Indian and Pacific Oceans, is a strategic move aimed at influencing the traffic passing through the South China Sea. By bypassing the passage between Indonesia and Malaysia, hundreds of miles south, this project can offer a quicker path for container ships and tankers by providing a shortcut to the Indian Ocean.
Thailand could benefit from the revenue from trade fees, but China will gain more from this tactical pathway. It would most likely be operated by a Chinese firm that could gain land concessions for military deployment, similar to how the Panama Canal was effectively a naval base when it was run by the United States.
China is fully aware that its greatest strength is also its greatest weakness: an economy open to the world and reliant on global trade. China will therefore find it necessary to spend enormous amounts of financial and political capital to either buy favors from or force concessions out of smaller nations.
Let us not forget that such moves are also not without precedent. The British Empire seized the lands through which the Suez Canal was built by forcing concessions from the Ottoman Empire. The United States also actively supported separatism in Panama, then part of Colombia, to secure land rights for the Panama Canal Zone.
China’s foreign policy, and consequently its entire future, depends on its ability to control global trade networks. Investments and political moves to build canals across strategic territories are prime examples of this mindset, and therefore must be closely observed by diplomats and analysts. China’s current investments in these projects might evolve into military buildups in the future, adding more dimensions to the power struggle between China and the United States.
Deniz Gulay is a junior double-majoring in history and Russian.
Views expressed in the opinions pages represent the opinions of the columnists. The only piece that represents the view of the Pipe Dream Editorial Board is the Staff Editorial.