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In 2013 President Xi Jinping announced the launch of two new Chinese connectivity projects: an “economic belt” along the historical Silk Road in Eurasia and a twenty-first-century Maritime Silk Road to expand cooperation between China and Southeast Asian nations. The common theme of both was to increase China’s collaboration and communication with regional nations to bolster mutual development and prosperity. Over the next decade the Belt and Road Initiative (BRI) became a gigantic infrastructure, trade, and connectivity project, spreading beyond Eurasia and Southeast Asia to regions such as South Asia, the Middle East, and many parts of Africa. Some China watchers argued that the BRI is China’s updated and planned grand strategic vision of its historical Middle Kingdom hierarchy—China centered in a global network of connectivity where all roads (territorial and maritime) lead to Beijing. Others worried that the BRI is China’s strategic plan to gain geopolitical power by making smaller and weaker countries beholden to it indefinitely. Still others cautioned that the BRI, far from being a monolithic and well-planned-out vision, is deeply fragmented by domestic interests, diluting its effectiveness as a unified grand strategy. These arguments evaluate whether the BRI is a success or failure for China—that is, whether the BRI strengthens China’s geopolitical status and brings it economic benefits. Those factors are important, but they are China-centric. In the end, success also depends on a more neglected consideration—the recipient countries’ perceptions of China and their reception of the BRI. Success or failure of the Belt and Road Initiative in South Asia can be determined by asking two questions. First, do recipient countries view the BRI as a positive Chinese initiative that brings significant benefits, either political or economic? The BRI and China are seen as synonymous, so positive views of the BRI can not only boost positive views of China but, in theory, also make recipient countries amenable to further cooperation with China. Second, has the recipient country been able to manage the BRI to advance its own domestic agenda? If recipient countries see the BRI as advancing their stated political or economic goals, then they are likely to continue to welcome expanded Chinese investment. Conversely, if they view the BRI as either not delivering on the promise of economic benefits or as leading to significant political side effects, then it can give recipient countries pause. In the long run, this could affect further cooperation with the BRI and China. In South Asia, even if a recipient country sees the BRI and China positively, it has not necessarily also been able to manage the BRI to its satisfaction. Pakistan is one example. Then again, even when the BRI and China are viewed negatively, such as in India, the government has been able to use the specter of the BRI to advance other interests. The lesson for the United States is that if it seeks to curb China’s influence in South Asia, it should pay attention to how potential recipients of this largesse respond to China and the BRI. The United States cannot match the BRI’s investments in South Asia, but it can support South Asian countries choosing to cooperate with China, as well as India, the dominant power in the region. If the BRI delivers on its promise of providing connectivity and infrastructure in South Asian countries that sorely need both, it can contribute to domestic stability—a less volatile South Asia is in U.S. interests. The United States can gain stronger partnerships and increased credibility by actively empowering South Asian countries to assess the BRI’s merits and demerits, and supporting alternatives for those who opt out, rather than opposing the BRI wholesale.

A potential side effect of Chinese infrastructure projects and the associated influx of Chinese workers and subsequent establishment of communities relates to the typical trafficking mechanisms employed by Chinese criminal networks. These rely on the cultural practice of guanxi (defined as ‘the basic dynamic in Chinese personalized networks of influence and refers to favours gained from social connections’)78 and high levels of social control and trust derived from ethnic kinship and family ties.79 These criminals also tend to be involved in, and control, the entire supply chain from source to distribution into the Chinese market. This introduces the risk that criminals might penetrate Chinese communities established in BRI-linked countries and leverage social ties to engage, or coerce, fellow Chinese nationals into illicit activities. A wildlife trader in Kunming (China) shared the following insight during an interview with researchers Daan van Uhm and Rebecca Wong:

Pangolin hunters in Myanmar and Indonesia, rhino poachers in South Africa or hunters of saiga antelopes in Kazakhstan and Mongolia all have contacts with the Chinese in those areas. Usually those ethnic Chinese persons own small shops as a cover for their illegal business. They deliver their valuable wildlife products and are paid by Chinese middlemen who have connections to my people.80

Global attention has focused on the plunge in the Shanghai stock market and mounting evidence that China’s economic growth is slowing dramatically. Moreover, the contagion appears to be spreading, characterized by extreme volatility and alarming declines in America’s own equity markets. Those worries are compounded because there always have been doubts about the accuracy of Beijing’s official economic statistics. Even before the current downturn, some outside experts believed that Chinese officials padded the results, making the country’s performance appear stronger than it actually was. If China is now teetering on the brink of recession, the political incentives for officials to conceal the extent of the damage would be quite powerful. The focus on the possible wider economic consequences of a severe Chinese economic slowdown is understandable, since the ramifications could be extremely unpleasant for the U.S. and global economies. But we should also be vigilant about how such economic stress might affect Beijing’s diplomatic and military behavior. It is not unprecedented for a government that feels besieged to attempt to distract a discontented public by fomenting a foreign policy crisis. In Henry IV, Shakespeare pithily described that process as the temptation to “busy giddy minds with foreign quarrels.” China’s leaders likely feel increasingly uncomfortable. The implicit bargain that has been in place since the onset of market-oriented reforms in the late 1970s has been that if the public does not challenge the Communist Party’s dominant political position, the Party will deliver an ever-rising standard of living for the people. The bloody Tiananmen Square crackdown in 1989 was a graphic reminder of what happens if the Party’s position is challenged. However, until now, the economic portion of the bargain seemed secure, characterized by breathtaking, often double digit, rates of growth. It is uncertain what happens if the Party can no longer maintain its part of the implicit bargain, but it is likely that a dangerous degree of public discontent will surface. Beijing might refrain from deliberately provoking a major foreign policy crisis, since the Chinese economy depends heavily on export markets, and access to those markets would be jeopardized by war. However, the need to preserve and strengthen national unity and distract the public from mounting economic troubles is likely to impel Chinese leaders to adopt very hardline policies in at least three areas. And all of those situations entail the danger of miscalculations that could lead to war. One issue is the South China Sea. Beijing has made extraordinarily broad territorial claims that encompass some 90 percent of that body of water. China is pressing its claims with air and naval patrols and the building of artificial islands. Those policies have brought Beijing into acrimonious disputes with neighbors such as Vietnam and the Philippines, which have rival territorial claims, and with the world’s leading maritime power, the United States, which resists any manifestation of Chinese control over the South China Sea and the crucial commercial lanes that pass through it. The conditions are in place for a nasty confrontation. Chinese leaders have already stressed the country’s alleged historical claims to the area, and made it clear that it will not tolerate being subjected to humiliation by outside powers. Such arguments are designed to gain domestic support by reminding the Chinese people of the country’s long period of weakness and humiliation in the 1800s and early 1900s. A second issue is Taiwan. Beijing has long argued that Taiwan is rightfully part of China and was stolen from the country in the Sino-Japanese war in 1895. Although Chinese leaders have exhibited patience regarding the issue of reunification, relying in large measure on growing cross-strait economic ties to entice Taiwan to eventually accept that outcome, Beijing has also reacted very sharply whenever Taiwanese officials have pushed an agenda of independence, as during the administration of Chen Shui-bian from 2000 to 2008. The danger or renewed confrontation is rising, since public opinion polls indicate that the nominee of Chen’s old party, the pro-independence Democratic Progressive Party, will be Taiwan’s next leader. A new crisis in the Taiwan Strait would be extremely serious, since the United States has obligated itself to consider any Chinese efforts at coercion as a “grave breach of the peace” of East Asia. Yet there is little doubt that there would be widespread domestic support on the mainland for a stern response by the Beijing government to a Taiwanese attempt to enhance its de-facto independence. Indeed, there might be more political danger to the regime if it did not take a strong stance on that issue. The third possible arena for crisis is the East China Sea. China is increasingly adamant about its claims to the Diaoyu/Senkaku islands, which are under Japanese control. From China’s perspective, those islands were stolen by Imperial Japan at the same time that Tokyo took possession of Taiwan following the 1895 war. And ginning up public anger against Japan is never difficult. China just finished celebrating the 70th anniversary of the end of World War II, which is touted in China as “the Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War.” Recalling Japan’s invasion of China, and the resulting atrocities, was a prominent theme of the various commemorative events. But the animosity is not based solely on historical grievances. Anger at Japan over the ongoing East China Sea dispute and other matters has already produced anti-Japanese riots in Chinese cities, characterized by attacks on Japanese businesses and automobiles. There is a powerful incentive for Chinese leaders to take an uncompromising stance on the Diaoyu/Senkaku feud, confident that the Chinese people will back such a stance. All of this suggests that the United States and its allies need to proceed cautiously about dealing with China, especially on these three issues. Now is not the time to press a Chinese leadership that likely feels beleaguered by the country’s economic woes. The last thing we should do is give those leaders further temptation to distract the Chinese people with a foreign policy confrontation. Such a strategy entails the grave risk of miscalculation and escalation, and that would be a tragedy for all concerned.

Several recent works on China and Sino–US relations have made substantial contributions to the current understanding of how and under what circumstances a combination of nuclear deterrence and economic interdependence may reduce the risk of war between major powers. At least four conclusions can be drawn from the review above: first, those who say that interdependence may both inhibit and drive conflict are right. Interdependence raises the cost of conflict for all sides but asymmetrical or unbalanced dependencies and negative trade expectations may generate tensions leading to trade wars among inter-dependent states that in turn increase the risk of military conflict (Copeland, 2015: 1, 14, 437; Roach, 2014). The risk may increase if one of the interdependent countries is governed by an inward-looking socio-economic coalition (Solingen, 2015); second, the risk of war between China and the US should not just be analysed bilaterally but include their allies and partners. Third party countries could drag China or the US into confrontation; third, in this context it is of some comfort that the three main economic powers in Northeast Asia (China, Japan and South Korea) are all deeply integrated economically through production networks within a global system of trade and finance (Ravenhill, 2014; Yoshimatsu, 2014: 576); and fourth, decisions for war and peace are taken by very few people, who act on the basis of their future expectations. International relations theory must be supplemented by foreign policy analysis in order to assess the value attributed by national decision-makers to economic development and their assessments of risks and opportunities. If leaders on either side of the Atlantic begin to seriously fear or anticipate their own nation’s decline then they may blame this on external dependence, appeal to anti-foreign sentiments, contemplate the use of force to gain respect or credibility, adopt protectionist policies, and ultimately refuse to be deterred by either nuclear arms or prospects of socioeconomic calamities. Such a dangerous shift could happen abruptly, i.e. under the instigation of actions by a third party – or against a third party. Yet as long as there is both nuclear deterrence and interdependence, the tensions in East Asia are unlikely to escalate to war. As Chan (2013) says, all states in the region are aware that they cannot count on support from either China or the US if they make provocative moves. The greatest risk is not that a territorial dispute leads to war under present circumstances but that changes in the world economy alter those circumstances in ways that render inter-state peace more precarious. If China and the US fail to rebalance their financial and trading relations (Roach, 2014) then a trade war could result, interrupting transnational production networks, provoking social distress, and exacerbating nationalist emotions. This could have unforeseen consequences in the field of security, with nuclear deterrence remaining the only factor to protect the world from Armageddon, and unreliably so. Deterrence could lose its credibility: one of the two great powers might gamble that the other yield in a cyber-war or conventional limited war, or third party countries might engage in conflict with each other, with a view to obliging Washington or Beijing to intervene.

Gauging by media coverage, one would be certain that China’s economy is on the edge of a crisis. Reports seem to be universally negative, so much so that my skeptic’s radar is blinking bright red telling me to not accept conventional wisdom so quickly.

Among analysts, most agree with the Council on Foreign Relation’s Zongyuan Zoe Liu and the Rhodium Group’s Logan Wright, also with CSIS, that long-term structural issues, such as debt and demography, are finally biting. The Peterson Institute’s Adam Posen emphasizes Xi’s pro-state interventionism and the negative reaction it is engendering as the main sources of weakness. One contrarian is Posen’s colleague Nicholas Lardy, whose careful reading of the data suggests it is premature to declare a permanent slowdown and shows there are already some signs of a modest rebound.

Whether or not the Chinese government can calm global investors' fears remains to be seen. Previous direct interventions in the stock market are associated with positive effects. However, the direct interventions themselves do not resolve the underlying fundamentals and risks not only being a band-aid on a gushing wound but the cause of potential capital misallocation as well, as seen in Japan, which has also directly intervened in equity markets in the past.

Direct interventions in the foreign exchange market may be unsustainable, given the fundamental dislocations in monetary policy and economic conditions between China and the rest of the world. Even within Asia, data from LSEG Workspace shows out of 12 countries, China is the only one cutting interest rates.

Beijing and Washington have become desensitized to the risk these circumstances pose. But in the militarization of foreign policy and the failure to grasp the full significance of that militarization, the pair are one accident and a bad decision removed from a catastrophic war. Mathematicians speak of the “edge of chaos”: the final point separating order from doom. A system operating at this edge has no room for error. This is where the accumulated weight of the past has brought the United States, China, and Taiwan. They walked right up to the edge of a war that could go nuclear several times in the past: in 1954-55, 1958, and 1996. Now, they seem to be living on that edge permanently.

In recent years, China’s policy has alienated Taiwan completely. As China has bullied, threatened, and displayed force at home and abroad, it has made unification unacceptable to much of the Taiwanese electorate. And it has enjoyed only mixed success in trying to isolate Taiwan diplomatically. It has managed to buy off many of Taiwan’s erstwhile allies, but its conduct over COVID-19 and support for Russia despite the invasion of Ukraine have cost it friends, too—and those former friends have turned to the island across the strait.

The underground banks operate largely by selling the cartels’ dollars to wealthy Chinese who, alarmed at the political tightening under Chinese leader Xi Jinping, are looking to circumvent capital controls and transfer their money out of the country.

In essence, the officials claim, a new global money laundering network has evolved that marries two powerful financial forces — the huge stockpiles of cash being accumulated by the Mexican drugs cartels from selling drugs in the US, and the rapidly growing volumes of capital seeking an escape route from China.

IT IS RARE these days for America and China to co-operate on anything. As The Economist went to press, America's secretary of state, Antony Blinken, was on a trip to China, in part to press his hosts to stop sending weapons-related materials to Russia's defence industries. He will be lucky to get a polite smile. So it is noteworthy that the two countries have recently decided to boost mutual support in another domain: the fight against money-laundering . This month they launched a bilateral forum to discuss the problem. Unlike Russia, it is a big one for both of them.

The menace has grown in recent years, fuelled by underground Chinese networks equipped with new technologies that can enable dirty money to be washed clean in minutes. For transnational criminal gangs, these shadowy "banks" are becoming the financiers of choice. Suppressing them requires the two great powers to talk. Amid their political rancour, discussions about money-laundering had been on ice for years. Their resumption marks "a big change, a big positive change", says an official from America's Treasury Department.

Following the legalization of marijuana in many states, Chinese-run marijuana farms have emerged across the U.S. Some are run by investor groups with a commercial growing license. But just as illegal marijuana shops have proliferated, so have unlicensed growing operations.

Illegal marijuana-growing, whether on a small or large scale, isn’t a new phenomenon in the U.S. “We were all illegal at one point,” said a now-licensed grower in Maine.

Southeast Asia’s criminal networks victimize millions of people throughout the world, but the burden is also borne by the people of Southeast Asia. They suffer in two main ways: from the networks’ negative impact on violence and conflict in the region, and from an array of economic and human costs of the scamming industry, many of which extend far beyond the costs faced by victim countries in other parts of the world.

The Impact on Violence and Conflict

Most consumers prefer, other things equal, to purchase from legal suppliers. This allows them to resolve disagreements about quality, service, and payment with lawsuits or by reporting to private and public watchdogs; it facilitates repeat shopping from a high-quality seller, and it avoids the risks of adulterated or excessively potent goods. Thus despite the costs created by regulation and taxation for most legal goods, black markets do not often arise.

Instead, black markets arise only when government policy forces markets underground by outlawing them or by imposing excessive regulation or taxation. After the United States repealed Alcohol Prohibition in 1933, most of the market returned to the legal sphere, except in states that continued prohibition or imposed excessive taxes.

Fast-forward to the present. Congress is actively seeking to decriminalize marijuana, and the Joe Biden administration has leveraged the Department of Health and Human Services (HHS) to petition the DEA to remove marijuana from Schedule I of the Controlled Substances Act (CSA) and reclassify it as a Schedule III drug. HHS, the principal federal health agency, is now leaning on the law enforcement side of government to ask for the drug to be reclassified within the CSA.

It’s hard to argue against medicine and science. The agency everyone is waiting on now is the DEA.

“I believe that the profits end up back in China,” Sheriff Dale Lancaster told the county’s Board of Commissioners. “Those profits are used to buy the chemicals to send to the cartel to make fentanyl. And fentanyl is killing our citizens.”

Illegal marijuana growing operations that have been busted across the state in recent months are suspected to be connected to “transnational criminal organizations” with ties to China, Darcie N. McElwee, U.S. Attorney for the District of Maine, said in May. However, McElwee did not mention the connection to fentanyl or say what other crimes the organizations are suspected of committing. Fentanyl is a powerful synthetic opioid drug that officials say has been leading to overdoses and deaths across the U.S. in recent years.

Because marijuana is on Schedule I, it’s been very difficult to conduct authorized clinical studies that involve administering the drug. That has created something of a Catch-22: calls for more research, but barriers to doing it. (Scientists sometimes rely instead on people’s own reports of their marijuana use.)

Schedule III drugs are easier to study, though the reclassification wouldn’t immediately reverse all barriers to study.

An attack on these important insects is exceedingly problematic. Wild bees are critical to safeguarding U.S. food supplies and growing our economy. Such utter disregard for bees — whether domestic or wild — puts the species one step closer to extinction.

Wild bee populations have dramatically declined in recent years. At least 37 percent of bee species are declining, according a 2015 United Nations report. Worse still, roughly 9 percent of bee species are facing extinction.

Mr. Negroponte noted the United States plays a critical role in global agriculture as the world’s largest producer of beef, soybeans, corn and poultry and a top exporter of a diverse group of foods such as almonds, apples, raisins, sorghum, pork and wheat. He also said the United States may need to be able to secure the safety and availability of food supplies of important allies such as Japan.

Mr. Negroponte said rising competition among countries and regions for finite resources such as water and arable land could hurt political stability and force U.S. military priorities to shift. He pointed to Syria and Iraq as currently being vulnerable to water scarcity because rivers, canals and dams are military targets.

Obviously, the rural healthcare situation matters in terms of food and energy security at home, but also in terms of economics—the United States is by far the largest global exporter of food, with roughly $40 billion separating America from number two, and is on the cusp of ending energy imports for the first time since 1950.

Although there may at first glance appear to be no close linkage between weapons of mass destruction and food, in the twenty-first century with world resources of food, land and water under growing stress, nothing can be ruled out. Indeed, chemical weapons have frequently been deployed in the Syrian civil war, which had drought, agricultural failure and hunger among its early drivers. And nuclear conflict remains a distinct possibility in South Asia and the Middle East, especially, as these regions are already stressed in terms of food, land and water, and their nuclear firepower or access to nuclear materials is multiplying.

It remains an open question whether panicking regimes in Russia, the USA or even France would be ruthless enough to deploy atomic weapons in an attempt to quell invasion by tens of millions of desperate refugees, fleeing famine and climate chaos in their own homelands – but the possibility ought not to be ignored.

Michael Klare: Yes, I think the Pentagon’s view of climate change, I think, is very distinctive and not well understood by the American public, and that’s why I think it’s so important, and that is that the Department of Defense sees climate change as… The term they use is as a threat multiplier. They say, look, we look out at the world and part of our job is to forecast ahead of time where our threat’s going to emerge to US security around the world. That’s our job, and to prepare for those threats, and we see that climate change is going to multiply threats in areas of the world that are already unstable, that are already suffering from scarcities of resources, where populations are divided and where resources are scarce and contested, and that this is going to create a multitude of new challenges for the United States and its allies around the world.

So, this notion of a threat multiplier is very much a part of the Pentagon’s understanding of climate change. What they mean by that is that societies are vulnerable in many ways and especially societies that are divided along ethnic and religious and racial lines as so many societies are, and if resources are scarce, housing, water, food, jobs, whatever, climate change is going to exacerbate these divisions within societies, including American society for that matter, but it’s going to exacerbate divisions around the world and it’s going to create a social breakdown and state collapse. And, the consequence of state collapse could include increased pandemics for example, and contribute to the spread of disease. It’s going to lead to mass migrations and mass migrations are going to become a growing problem for the US.