The New Map: Energy, Climate, and the Clash of Nations

by Daniel Yergin

In an October 2018 speech, Vice President Mike Pence elaborated on the new perspective. China, he said, had “masterminded the wholesale theft of American technology” and has built “an unparalleled surveillance state” and “an Orwellian system.” It is seeking “to erode America’s military advantages” and “push the United States of America from the Western Pacific.” But, Pence added, “We will not be intimated.” In what is otherwise a deeply divided and partisan Washington, Pence’s remarks reflect what has become a broad consensus across party lines, as would become evident in the 2020 presidential campaign.

China responded with its own white paper, “China’s National Defense in the New Era.” While more moderate in some parts—it talked about areas of cooperation between China and the United States, including their respective militaries—it too defined the “new era” as one of great power “strategic competition.” In the Chinese version, the fault lay with America’s “growing hegemonism, power politics, unilateralism.” The United States, it said, is pursuing “absolute military superiority” and has “undermined global strategic security.” The Asia-Pacific, it said, “has become a focus of major country competition” because “countries from outside the region”—that is, the United States—“illegally enter China’s territorial waters and the waters and airspace near China’s islands and reefs, undermining China’s national security.” China, it declared, would resist all threats to its position.

The white paper went on to blame “external forces”—again, the United States—for fueling the Taiwanese independence movement. Just to be clear about what was already abundantly clear, Senior Colonel Wu Qian, in presenting the white paper in Beijing, said that in the event of a move toward Taiwanese independence, the People’s Liberation Army was “ready to go to

Together, the Chinese white paper and two U.S. papers, one analyst soberly observed, provide “a clear warning of growing strategic rivalry between an existing and emerging superpower”—a rivalry “that will shape the future of both China and the U.S. for decades to come.” In the national security establishments of both nations, each side is focusing on the other as the future enemy.

The continuing rancor over the coronavirus and its origins in Wuhan made relations worse. And then, in May 2020, after months of demonstrations in Hong Kong, some violent, Beijing imposed its security laws and security systems on the semiautonomous Hong Kong. China was abrogating the concept of “one country, two systems,” which had been the governing principle since the British handover of Hong Kong to China in 1997. Beijing asserted that this was a purely “internal” matter. The international reaction was strong. By coincidence, at almost exactly the same time, the White House issued a new strategy on China. “Beijing,” it said, was “seeking to transform the international order to align with” the communist party’s “interests and ideology.” In response, the administration has adopted “a competitive approach,” which includes “a tolerance of greater bilateral friction.” The friction would continue to increase.

Underlying the trade war is a deeper concern over “future technologies.” A high-tech algorithmic arms race is already under way, led by competition for preeminence in artificial intelligence. Beijing’s “Made in China” 2025 strategy, enunciated in 2017, aims to make China a leader in ten high-tech industries. The Chinese point out that their per capita income is only about one-sixth that of the United States and that it needs to move up the value chain to avoid the stagnation of the “middle income trap.” The goal is also to “catch up” with the United States. In his speech, Pence responded that “the Communist Party” of China could end up “controlling 90 percent of the world’s most advanced industries,” which would enable it “to win the commanding heights of the 21st century economy.”

The battle over technology has already been joined over 5G connectivity and, specifically, the Chinese company Huawei. The largest telecommunications company in the world and at the forefront of 5G—fifth-generation cellular network technology—Huawei has become one of China’s great national champions, a symbol of its technological and commercial prowess. Washington argues that Huawei’s technology provides a back door for Chinese government surveillance and possible manipulation and that the company is covertly connected to the government and the Communist Party. It banned Huawei from U.S. telecommunications networks and is trying to persuade other countries to do the same. Indeed, in a manner reminiscent of the British and German battleships before World War I, fifth-generation cellular—5G—along with Huawei has become in this era the embodiment of the new rivalry.

Amid the rising tensions, a warning about the dangers of “mutual animosity and zero-sum calculations” came from Robert Zoellick, who in 2005, as deputy secretary of state, had originally outlined the concept of China as a “responsible stakeholder.” A decade and a half later, Zoellick pointed out that the word “stakeholder” in the title of his speech had been followed by a question mark. Nothing was for sure. But, said Zoellick, even with all the evident tensions, China had in fact engaged in multiple ways within the international system that the United States, Western Europe, and Japan had originally created. But now, he added, the United States was pushing China “into championing its own parallel, separate system with very different rules.” And that could be very costly, both economically and politically.

Economic interdependence has been the ballast to the military and strategic rivalry, but that ballast appears to be at risk of being dumped overboard into the South China Sea, along with the more cooperative attitude that went with it. This new instability in the economic relationship adds to the risk that “accident,” confrontation, or clash will not be managed and contained.

The obvious fact is that neither the United States nor China is “going away.” While tensions are rising, the G2 are hitched together on the same planet. Although there is little possibility of a grand bargain, the application of practical solutions, combined with prudence, can help mitigate the risks. Better that, it would seem, than to have to borrow from mariners’ maps and apply the legend “Dangerous Ground” to the new geopolitical maps of the twenty-first century.

Turkmenistan, with abundant natural gas resources, became the largest gas exporter to China. In Kazakhstan, Chinese companies represent about 20 percent of the country’s oil output. A fourteen-hundred-mile pipeline from the Caspian shore of western Kazakhstan carries oil across the country to China, making Kazakhstan an important source of diversification for Beijing.

East Turkistan Islamic Movement, a violent jihadist group that was affiliated

with and provided jihadists to other Central Asian and Mideast extremist groups.

Following a series of terrorist attacks that left scores dead, Beijing has clamped down with great severity. It has established large camps for Uighurs and other Muslims, holding perhaps as many as a million people. Chinese officials describe them as “education and training centers.” Critics describe them differently—as “mass incarceration” and indoctrination. These camps have become a focus of controversy and stimulated much international protest.

After the U.S. House of Representatives passed a bill calling for sanctions and restrictions on transactions with Chinese companies involved in the region, the Foreign Ministry in Beijing denounced the bill as “gross” interference “in China’s internal affairs” and said that China’s policy is “about fighting violence, terrorism and separatism” and “advancing deradicalization.” This campaign—along with Beijing’s new security system for Hong Kong and the continuing rancor over the novel coronavirus—adds further strains to China’s relationships with the United States and other Western countries.

Belt and Road is focused on energy, infrastructure, and transportation with an overall potential investment estimated at about $1.4 trillion—a scale never before seen and at least seven times larger, measured in today’s dollars, than the Marshall Plan, the U.S. initiative to rebuild Europe after World War II.7 It is not just physical goods that China is seeking to export to Eurasia and the world beyond; it is also aspects of China’s own economic model.

There is also the geopolitical element. In 2011, the Obama administration announced a “pivot” to Asia. For Washington, this reflected war-weariness, a drive to shift away from the Middle East and Afghanistan, with the seemingly endless wars and heavy costs, and instead toward the most dynamic part of the world economy. The pivot was meant to be a message of strategic reassurance to Asian countries, other than China, that the United States was committed to the region, was not ceding it to Chinese predominance, and indeed would increase its engagement. The pivot was subsequently rebranded as a “rebalancing.”

In Beijing, the U.S. pivot was derided as “this ill-thought-out policy of rebalancing,” and was portrayed as an American strategy to “contain” China, alienate its neighbors from Beijing, and prevent it from assuming its rightful role of predominance in Asia. In 2012, an influential article advised “marching west” to counterbalance America’s “rebalance” toward Asia and to blunt competition with the United States.

Going west came to mean “One Belt,” otherwise known as the “Eurasian Land Bridge,” which enables China to expand its economic clout and its influence and relevance through Central Asia, the Middle East, and Russia and into Europe. These land connections would also offset one of China’s great strategic fears—about the U.S. Navy and the “Malacca Dilemma.” Going west would, in the words of a Chinese general, provide China with a “strategic hinterland and international space.”

The maritime initiative—called the “One Road”—swings down around Southeast Asia and South Asia to Africa and then up past the Arabian Peninsula to the Mediterranean and on to Europe. It is punctuated by what some call the “string of pearls,” a series of expanded ports that will promote Chinese trade and provide anchorage for the Chinese navy.

China would bring technology, finance, and capabilities to work at scale, as well as the ability to get things done expeditiously. What it would not bring is what the United States and Europe promote—“democracy” and “freedom,” opposition parties and NGOs, and critiques of internal political practices and elections. What the West champions as “universal values” the Chinese dismiss as “western values.” With China at the helm, there would be no agenda of “regime change,” no support for “...

One of China’s great tools for achieving its goal of “connectivity” is its ability to mobilize capital on a massive scale. A new, wholly Chinese Silk Road Fund has been created with upwards of $60 billion. China also established a new Asia Infrastructure Investment Bank (AIIB) to finance developments along these corridors. This new institution reflects China’s dissatisfaction with what it considers its inadequate say in the “governance” of the World Bank, not commensurate with its standing in the world economy, and with the tendency toward “political correctness” in the World Bank’s lending (solar and wind, but no oil and gas extraction, and certainly no coal). The Obama administration wasted no time in opposing the creation of a new Chinese-dominated international financial institution. To Washington’s dismay, Britain rushed to be the first European country to sign on, beating out Luxembourg. Other stalwart U.S. allies hastened to join. All this left the United States and Japan as the odd men out. There’s no question who leads the AIIB: China subscribed 32 percent of the capital and has 30 percent of the voting rights. Yet at the same time, the biggest recipient of AIIB loans so far has been India.

Belt and Road has not only become an organizing principle for Chinese foreign and economic policy. It has also become a bulwark of political, academic, and popular discourse. The number of academic articles in China dealing with BRI ballooned from 492 in 2014 to 8,400 in 2015. China, the world’s largest movie market, established the annual Silk Road International Film Festival to bring movie people together from a host of countries to encourage joint production and highlight films that celebrate BRI values. In a film called China Salesman, a Chinese mobile phone salesman outwits European rivals in a hard-fought battle for a contract in North Africa. In Kung Fu Yoga, Chinese and Indian archeologists team up to seek an ancient treasure. “We could increase the cooperation in archeological research between China and India,” declaims the Indian character. “It would also be in line with the One Belt One Road policy.” “So well said!” replies the Chinese character.11

How many countries are candidates for Belt and Road? Many numbers have been bruited about—up to 131. But Chinese officials go out of their way to say that there is no specific number, that instead, as one official put it, Belt and Road “is not a geographic concept. It’s about development, about strategically important projects that are financially sound.” Eastern and Central European countries, some of them members of the European Union, have aligned with it, as have Italy and Greece.

Chinese company now owns a controlling share in Piraeus, the port for Athens. The president of Panama asked Xi Jinping if Panama could be part of the BRI. Certainly, Xi replied. “Connectivity” is basic to Belt and Road, and the Panama Canal provides major “connectivity” to the world economy. China happens to be the second-largest user of the canal; a Chinese company has purchased the largest port facility on the canal, and another has proposed a $4.1 billion high-speed railway project for Panama. China finally clarified the number of eligible members of the Belt and Road; it was open to “all nations.” Yet the “core” countries could be narrowed down to a much smaller number that have signed “comprehensive strategic partnerships” with China.

Khorgas, once a crossing point through the mountains on the ancient Silk Road, is today the site on the Chinese-Kazakh border of a giant “land port,” a huge railway and transport hub that will speed containers from China on to Europe. Regular train service already delivers containers of Chinese goods to Europe in about half the time it takes for a container ship, though at higher cost. The first regular freight train service to the Middle East reached Tehran in 2016. China is spearheading a $6 billion

high-speed railroad project punching through mountains in Laos that will connect China with seven countries and will at some points require tens of thousands of Chinese workers on location. It has invested in a multitude of energy projects. It is promoting the sale of its high-speed trains and its technology for ultra-high-voltage power lines, which China’s State Grid company developed to efficiently carry electricity generated in western China over long distances. After the United States pulled out of the airport in the Central Asian republic of Kyrgyzstan, which had been used to supply allied troops in Afghanistan, the Chinese stepped in with a billion-dollar proposal to upgrade it.

Yet grand strategy and on-the-ground implementation are two different things. Chinese financial institutions do not want to repeat the experience of the “going out” period in the 2000s, when Chinese companies paid top dollar for foreign assets. “Our performance will evaluate our decisions,” observed one official. “Projects have to be not only strategically important but financially sound.” Many deals have been complicated to negotiate, taken longer than expected, and sometimes been rescinded or fallen apart. In recipient countries, decision makers argue among themselves about what they are giving up and whether they are ceding part of their economy to China and what criticisms they will face domestically in the future if they do a project—but also if they don’t.

The biggest project to date, by far, is the $62 billion China-Pakistan Economic Corridor. Almost 70 percent of it is for electric power–related investment. The rest is for highways, oil and gas pipelines, and most notably a major port at the coastal town of Gwadar, located strategically on the way to the Persian Gulf and the Suez Canal. A putative landmark for the Maritime Silk Road, the port could be a convenient stopping point for the Chinese navy. Gwadar is connected to China not only by sea. At great cost and with extraordinary difficulty—including surmounting the sixteen-thousand-foot Khunjerab Pass, the highest border crossing in the world—a modern expanded highway system has been built to move goods from China to Gwadar. As the Hong Kong newspaper the South China Morning Post pointedly observed, the Gwadar port-and-road system provides “an alternative shipping route to the Malacca Strait, which is frequently patrolled by the United States.”15 The Chinese investment in the power sector is increasing electricity supplies, desperately needed in a power-short country, and thus helping Pakistani manufacturing and export. Yet at the same time, Pakistan’s import bill has shot up owing to the costs of importing of goods from China for the projects. The country is behind on repaying the Chinese loans, and its indebtedness is rising rapidly. This sent Pakistan back to the International Monetary Fund in 2019 for its twelfth bailout since the late 1980s. And because of the larg...

This points to what Christine Lagarde, formerly managing director of the IMF and now head of the European Central Bank, diplomatically called the risk of “problematic increase in debt.” Critics call it the “debt trap,” which they say could provide political and economic leverage to China. When countries cannot make their debt repayments, Chinese entities can take control. Case study number one is the port of Hambantota, in Sri Lanka, for which China provided $1.1 billion in loans. But the port has had little traffic and there was no chance of its ever earning sufficient revenues to repay the loans. So in exchange for cancellation of the debt, a state-owned Chinese company took a ninety-nine-year lease. But the Sri Lankan government, pressed hard by India, did extract a promise from the Chinese not to use Hambantota, strategically located on the Indian Ocean, for military purposes.

One of the most explicit challenges to the debt question came from Mohammad Mahathir, Malaysia’s long-serving prime minister who returned as prime minister in 2018. While on a trip to China, he abruptly announced the cancellation of $23 billion worth of rail and pipeline deals with Beijing. At age ninety-three, Mahathir had no hesitation in speaking his mind, warning his hosts against “a new version of colonialism.” Malaysia, he explained, could not afford such debt. “I believe China itself does not want to see Malaysia become a bankrupt country,” he said.

But a few days later, Malaysia’s foreign ministry hastened to make clear that the country remained completely committed to participating in Belt and Road. After a 30 percent cut in the price of the rail project, Mahathir himself announced his support for Belt and Road, although he took advantage of the 2019 BRI conference in Beijing to pointedly call for “freedom of passage” in the South China Sea.

In response to criticism about debt, and Beijing’s own worries about repayment, Xi in 2019 presented a “debt sustainability framework,” aimed at preventing borrowers from falling into the debt trap. This was codified by the ministry of finance as a “policy tool.”19 But a year later, the devastating economic impact of the coronavirus crisis on so many countries meant that their debt burdens would become a far bigger problem.

Many countries want the investment and want to be sure that they are part of this new global economy, and they do not want to be left out of the China-driven “globalization 2.0.” At the same time, however, they want to ensure their own independence of action and will seek to balance the growing Chinese presence by engaging with Russia and the United States. The United States remains, after all, the most important economy in the world, and very important in terms of security.

And yet the United States is seen by many countries as stepping back, increasingly unpredictable and no longer reliable, which increases the allure of engagement with China. As one Chinese official observed, “The pullback of the United States is helping us.”

Yet Belt and Road’s massive mobilization of capital has galvanized action in Washington. When the Trump administration first came in, one agency on the list to be axed was the Overseas Private Investment Corporation, a government agency that lowers the risk of investing abroad for U.S. firms by providing political risk insurance. But now OPIC has been combined with another U.S. agency to become the U.S. International Development Finance Corporation, with global infrastructure investment ...

Russia, for now, is willing to see its Eurasian Economic Union overlap with the BRI. Russia does not have the means to be a significant global funder, and it needs foreign investment itself; and, of course, this fits with its pivot to the east and alignment with China on the issue of “absolute sovereignty.” Yet at the same time, Russia continues to see Central Asia as its sphere of influence an...

The one country in the region that is most concerned by Belt and Road is the oth...

It sees Belt and Road as an engine

of Chinese domination, potentially leading to what is described as the “encirclement” of India, as it also worries about Chinese naval activity in the region. “Connectivity itself cannot override or undermine the sovereignty of other nations,” said Prime Minister Narendra Modi. India and China clash over competing maps. They argue about territorial claims in the “roof of the world,” the Himalayas, and indeed have gone to war over those claims.

India has unveiled its own “Act East” policy, motivated in significant part, one scholar has written, by “deep distrust” of Belt and Road, “which it assesses to be a strategic p...

Act East has four objectives: “securing” the Indian Ocean; deepening relations with Southeast Asia; strengthening strategic partnerships with the United States, Japan, and Australia...

Yet for now, for many nations, China is offering one of the best deals in town. Countries, looking at where the money for infrastructure and energy investment is going to come from and wanting to lock in their place on the new map of the global economy, are concluding that there is advantage to attaching themselves to a rising China and an engaged China, rather than to an America that may increasingly seem to some both inconstant and receding.

Islamic State in Iraq and Syria (ISIS)—charged

over two hundred people—members of the royal family, business and government leaders, present and former cabinet ministers—were arrested, charged with corruption, and detained in that very same Ritz-Carlton, now transformed into a prison.

Mohammed bin Salman—known as MBS—would

On Salman’s accession to the throne in 2015, Mohammed, heretofore largely unknown, catapulted at age twenty-nine into the position of deputy crown prince—and quickly assumed additional power as minister of defense and head of both the supreme economic council and the supreme council overseeing the oil industry. He oversaw the launch of what would prove the protracted war against the rebel Houthis in Yemen. In June 2017, MBS pushed his cousin Mohammed bin Nayef aside as crown prince. Previously interior minister, bin Nayef had led the anti-extremist campaign since the early 2000s and was well known to Washington. Now MBS was next in line to be king, with the potential for a very long timeline as his father’s successor, whenever that time came. And the ministry of interior, with its responsibilities for domestic security, was also now under his sway.

For the economy, MBS promulgated Vision 2030, which promises much more than reform, nothing less than a transformation of Saudi Arabia—moving away from an economy so heavily dependent on oil and thus so vulnerable to the boom-and-bust cycles of the oil market. Instead, the economy is to be diversified, made more competitive, more entrepreneurial, and more high-tech.

By proclaiming a new era in Saudi Arabia, the crown prince is appealing to what he sees as his constituency—the social-media-savvy 70 percent of Saudis who are thirty-five years old or younger. For them, without change, the number of jobs will be insufficient, leaving th...

Central to Saudi Arabia’s challenges is its dependence on oil exports. “We will not allow our country ever to be at the mercy of commodity price volatility or external markets,” says MBS. Yet he also declares that Saudi Arabia has “a case of addiction to oil.” To explain the new policies, he turns to history and his grandfather. “King Abdul Aziz and the men who worked with him,” he says, had “established the kingdom without depending on oil, and they ran this state without oil, and lived in this state without oi...