In an ongoing series exploring the effects of China’s Belt and Road Initiative on the cities involved, our next stop is the East African city-state of Djibouti: a strategic choke point at the entrance to the Red Sea whose future remains uncertain… even with the support of China.
China’s Belt and Road Initiative has been described as a modern-day silk road. Encompassing a series of massive infrastructural and investment projects across parts of Europe, Africa and Asia, it follows several routes from mainland and coastal China, across the sea and over land, through the Central Asian republics and several southeast Asian port cities and reaching as far as Djibouti and Mombasa in East Africa, Duisburg in Germany and Venice in Italy. As part of an ongoing series exploring the effects this huge project is having on the cities involved, our first stop was the Chinese city of Xi’an, next up Djibouti City.
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The city state of Djibouti is one of the principal East African beneficiaries of the Belt and Road Initiative. Located on the Bab el-Mandeb strait – the strategically vital entrance to the Red Sea, where ships travelling from East Asia can quickly proceed through the Suez Canal, over the Mediterranean and onto the Atlantic Ocean – it also has the advantage of providing the main channel through which neighbouring (landlocked) Ethiopia trades with the world.
Improving the access to Djibouti’s much larger neighbour
As such, China has already funded a major railway link connecting Djibouti City to the Ethiopian capital of Addis Ababa, which opened last year and has cut journey times down from days to hours. Financed and built by China, using Chinese technology and operated according to Chinese standards, this railway is specifically geared towards improving the super power’s access to Djibouti’s much larger neighbour, whose rapidly growing economy offers, among other things: cheap labour, tariff-free trade with the US market (through the African Growth and Opportunity Act) and an important source of soybeans.
Economic “choke point”
China’s current and future plans also involve funding construction of the Djibouti International Free Trade Zone (DIFTZ). Free trade zones are special economic areas, usually based around major ports, which allow for goods to be landed, stored, handled and manufactured under specific customs regulations and generally without customs duty. Representing an essential feature of a global economy that relies heavily on the frictionless movement of goods, free trade zones are absolutely vital in the kind of economic “choke point” that the Bab el-Mandeb Strait represents.
Djibouti as the New Dubai?
The DIFTZ will become Africa’s largest free trade zone when it’s completed, spanning 4,800 hectares and offering dedicated logistics, retail, business support and processing facilities and reportedly bringing an estimated 350,000 new jobs over the next ten years. It will also host the Djibouti Business District, set to be completed in 2021, which a slick rendering shows jutting out towards the sea, with cruise ships docked on the waterfront and buildings grouped around a series of concentric treelined boulevards. It’s all somewhat reminiscent of nearby cities of the Arabian peninsula, indeed, some have gone as far as to call Djibouti the New Dubai.
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Unique strategic position
As with every city affected by China’s New Silk Road, things appear to be changing pretty fast. But for Djibouti, this is just the most recent episode in a long history of development brought about by its unique strategic position. While buildings from its long era as a French colony still fill the city, more recently, it has had the dubious honour of being the country with the most foreign military bases (US, China, France, Saudi Arabia and Japan all have bases stationed in the country). Meanwhile, its economic development in the past few decades has been driven by the decades long war between Ethiopia and Eritrea, during which it offered Ethiopia a vital link to international markets.
Eritrea is soon to open two new free trade zones of its own
But here’s the kicker, this war was finally officially concluded last year. Now that its whole stretch of coast is fully accessible to the Ethiopian economy, Eritrea is soon to open two new free trade zones of its own, in the Red Sea ports of Massawa and Assab, a move which could cost Djibouti a 75% loss in Ethiopian trade and port tax revenue according to one report.
Meanwhile, to add insult to injury, according to a recent article in the South China Morning Post, the aforementioned Addis Ababa-Djibouti railway has already had to restructure its debt because of underuse caused by power shortages, leading some Chinese reports to question whether the Belt and Road Initiative has fully accounted for the risk involved in these ambitious infrastructural projects in developing countries.
The volatile and capricious nature of the global market
This says a lot about the exceptionally volatile and capricious nature of the global market in which all this urban development is supposed to be happening. Just as Djibouti could be the New Dubai, so too could it end up lumbered with a couple of massive white elephants in the form of an unused railway and an empty business district. Either way, ordinary East African cities are likely to lose out as their national governments are forced to compete in a race to the bottom to attract global trade.
Read the article about our first stop: the ancient yet thoroughly modern Chinese city of Xi’an.
In an ongoing series exploring the effects of China’s Belt and Road Initiative on the cities involved, our first stop is the ancient yet thoroughly modern Chinese city of Xi’an.
China’s Belt and Road Initiative has been described as a modern-day silk road. Encompassing a series of massive infrastructural and investment projects spread across parts of Europe, Africa and Asia, it follows several routes from mainland and coastal China, across the sea and over land, through the Central Asian republics and several southeast Asian port cities and reaching as far as Djibouti and Mombasa in East Africa, Duisburg in Germany and Venice in Italy. As part of an ongoing series exploring the effects this huge project is having on the cities involved, our first stop is the Chinese city of Xi’an.
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Xi’an is a good place to start discussing the Belt and Road initiative. Not only was it where the original silk road began but its transformation in recent years also captures some of the difficulties presented by such a massive initiative.
While the city had been a key crossroad between China, the Middle East and Europe for millenia and was the first capital of a unified China, its recent history was one of relative stagnation. Being situated squarely inland, it missed out on the country’s early moves toward economic liberalisation, which primarily benefited coastal cities that were better connected to international markets.
From stagnation to departure
The big turning point came several years before the official announcement of the Belt and Road Initiative. In 2008, the Xi’an International Trade and Logistics Park became China’s largest inland port. Then, shortly after that, in 2009, Zhao Leji — then secretary of the Shaanxi province of which Xi’an is the capital and now one of the seven members of the China’s most senior governing body — secured party approval to turn the city into an “international metropolis”.
This designation ensured significant funding for massive infrastructural expansion: encompassing rail, bus and air travel. In 2012, excavation began on a large subway network. That same year, the city’s airport was significantly expanded and the Xi’an North Railway Station was opened. Serviced by the Longhai railway, the train station quickly became one of Asia’s largest rail terminals, now serving 82 million passengers each year.
Huge influx of foreign visitors
All this lends itself well to another central aspect of the Chinese government’s plans for Xi’an: promoting tourist trade. China is set to be the world’s most visited country by 2030 and Xi’an’s rich cultural heritage means it is well placed to capitalise on this new growth area. Along with the famous Terracotta Army contained within the 2nd Century BC mausoleum built for China’s first emperor Qin Shi Huang, Xi’an hosts a 14th Century great mosque set within a thronging Muslim quarter, a 7th Century Buddhist Pagoda and a fully intact city wall, some of which also dates back to the 7th Century. With the active support of the government and such a plethora of attractions, there’s sure to be a huge influx of foreign visitors to the city in the coming years.
This shift to tourism and infrastructural integration is suggestive of the way many Chinese cities have been changing in the 21st Century: less emphasis on foreign trade, greater logistical and infrastructural integration and a focus on both mass consumption and mass production. For cities like Xi’an, the future will be fast and it will be cosmopolitan.
As people become better connected and more exposed to foreign experiences, all while consuming ever more resources, the question is whether it will be possible for the government both to contain and sustain the forces brought about by this more connected and fast-moving urban reality.
World’s largest air purifier
On this note, Xi’an already has some of the worst pollution in the country, due mainly to the fact the city’s winter heating is derived from coal. To combat this, the city has built what is believed to be the world’s largest air purifier, standing at 100-meter-tall. The tower — which relies on solar updraft and filters to clean the air — has already managed to significantly improve air quality in the city, with smog ratings having been reduced to moderate levels even on severely polluted days.
Tellingly, this already sizable tower is in fact a prototype for a much larger version, projected to reach 500-meter-tall and capable of purifying most of the air within a small city. As ever grander technological solutions emerge to handle the ever growing output of all this economic acceleration, it’s fair to wonder whether China can continue to keep a handle on all the forces set in train by the Belt and Road Initiative.
