The ‘Belt and Road’ projects China doesn’t want anyone talking about

HONG KONG — Kunming, Yunnan’s provincial capital, occupies a key place in China’s economic diplomacy efforts as the terminus of oil and gas pipelines from the Bay of Bengal and the starting point of a planned railway network winding through Indo-China to Singapore.

But the provincial authorities have obscured the location of a brand new, 29.2 billion yuan (S$5.9 billion) oil refinery that sits at the end of the 2,500km pipeline and made talk about the rail network taboo.

The two projects, linked to China’s ambitious “Belt and Road” trade-development scheme, have sparked protests, quarrels and suspicions in Yunnan and in neighbouring countries before delivering on promises of peace and prosperity.

Kunming taxi drivers complain that major Chinese online map apps do not show the location of the refinery, which has been a controversial project ever since huge protests against it in 2013.

“Last time, I lost my way and ran into many dead-end roads when trying to get close to the project,” taxi driver Ge Changshui said. “It’s easy to see the brand-new smokestacks, towering high in the air, from very far away. But it’s also easy to get lost when approaching the refinery for the first time.”

Mr Ge said no road signs mentioned the refinery and there wasn’t even a sign at its entrance.

“Civil servants, students, taxi drivers and reporters of state-run media have been told by their institutes and departments not to talk about the (refinery) project in public,” said Mr Jay Chen, a reporter at a Kunming newspaper.

Central government organs such as the Xinhua news agency could release information about it, he added, but “no one would pitch the idea in the newsroom because we all know it’s forbidden to do independent interviews there”.

The “Belt and Road Initiative”, unveiled by President Xi Jinping in September 2013, aims to connect China with dozens of countries in Asia, Africa and beyond through a network of overland corridors and sea routes that will build infrastructure, financial and trade ties.

The new China National Petroleum Corporation (CNPC) refinery, in Anning, on the western outskirts of Kunming, began trial operations this month and will be capable of processing 13 million tonnes of crude oil a year. It sits at the end of a pipeline running through Myanmar which slices 1,200km off transportation distances from the Middle East and Africa and avoids the need to have tankers pass through the Malacca Strait, a potential choke point for China’s energy supplies, through which about 80 per cent of its oil imports now pass.

A parallel gas pipeline has delivered 13.5 billion cubic metres of natural gas to China since 2013, Xinhua reported.

Construction of the crude oil pipeline started in 2007 and was completed in 2014, but it only started operation in May this year. Xinhua reported that a Suezmax-sized tanker, capable of holding 140,000 tonnes of crude, began offloading oil for the pipeline at Myanmar’s Made Island in April.

The two pipelines could bring 22 million metric tonnes of crude oil and 12 billion cubic metres of natural gas into China each year, Xinhua reported. In return, Myanmar would receive US$13.81 million (S$18.8 million) a year in a royalties and an oil transit fee of US$1 a tonne. As part of a 30-year agreement it would also get 2 million tonnes of crude oil and up to 2.4 billion cubic metres of natural gas a year, Xinhua said.

But conflict in northern Myanmar, which flared late last year, poses serious risks to the pipelines. The fighting temporarily halted cross-border trade and prompted thousands of Myanmese to seek asylum in China. Mr Peng Nian, an international studies specialist at Hong Kong Baptist University said that if the conflict escalated, flows of oil and gas through the pipelines could be halted.

Reuters, citing two senior Chinese industry sources, reported in October that the refinery was facing a delayed start-up after CNPC subsidiary PetroChina balked at paying an extra tax for piping crude oil through Myanmar.

Few people in Kunming are aware that the refinery will soon go into production, even though the project, and an associated paraxylene plant that would have produced 500,000 tonnes of the toxic chemical a year, brought thousands of protesters onto the city’s streets four years ago when they were in the planning stage.

Paraxylene, which is used in making plastic bottles and polyester, can be dangerous if inhaled or ingested and the city’s mayor at the time, Mr Li Wenrong, promised the government would not hesitate to cancel the paraxylene project if most people opposed it.

But the public have not been told whether the new refinery includes a paraxylene plant and CNPC did not reply to queries about it.

“I feel heartbroken now that the chimneys have started smoking,” taxi driver Ge said. “Air and water pollution is bound to follow.”

Mr Chen said the other taboo topic was the “Trans-Asian Railway”, which had been given a high profile at various official forums until two years ago, when the propaganda department ordered local media to stop using the term.

“It’s because the term sounded so aggressive about expanding into other countries,” he said, adding it could have made neighbouring countries fear rather than welcome being drawn into China’s economic orbit.

The proposed single-gauge railway network, starting in Kunming and running through Vietnam, Cambodia, Laos, Thailand and Malaysia before terminating in Singapore, is an important part of Beijing’s plan for greater regional connectivity and would turn Kunming into a transportation hub.

Most of the countries involved have existing railways but they operate on different gauge tracks, meaning goods have to be unloaded and transferred onto another train to continue their journey. Two years ago, China Railway Tunnel Group deputy chief engineer Wang Mengshu said the existing railways would be changed to adopt Chinese technology and China’s standard gauge, the guancha.cn news portal reported.

Xinhua has reported that 13 railway lines spanning more than 2,300km are being built in Yunnan this year at a cost of more than 244 billion yuan, but progress has been less smooth on proposed South-east Asian lines due to local resistance.

On July 11, Thailand approved US$5.2 billion for the construction of the first stretch of a long-delayed high-speed railway that will form part of the trans-Asian railway.

The project had been dogged by disagreements over issues such as its cost, investment-sharing and development rights. Thai engineers demanded in June that technology transfers from China be part of the Thai-Chinese rail project to connect Bangkok with Nakhon Ratchasima, 250km to the north-east, raising uncertainty over the project even though Thailand’s military government pledged to clear away obstacles.

A China Railway Group railway project in Laos has also been delayed by fundraising, land requisition and village resettlement issues, and construction of a high-speed line in Indonesia, linking Jakarta and Bandung, was delayed for a year due to local opposition to the route. China Railway and its Indonesian partners received permits to start construction of that line in March.

Dr Lee Chih-horng, a research fellow at the Longus Institute for Development and Strategy in Singapore, said Chinese officials were not used to considering other countries’ concerns.

“Most Chinese officials are used to focusing on expanding the scale of infrastructure development and only pursue rapid economic growth on the mainland,” he said. “They also copied that way of thinking when promoting major cross-border infrastructure, with no elaborate efforts to solve locals’ worries about environmental protection and the impact of these projects on local society, culture and even religion.

“On the mainland, they can easily stifle public debate and concerns about infrastructure projects. But that does not work well on cross-border projects as it’s no longer only about China’s national strategy or the political performance of Chinese officials, because various interests and people overseas are involved.”

Dr Lee said delays and suspensions of cross-border projects were a reminder to the Chinese authorities of the potential problems, but keeping information from the public was not a good way to solve public doubts about them.

Kunming businesswoman Yang Mei said the refinery was about 30km from residential areas and upwind of Kunming.

“Kunming residents had several massive protests to oppose the construction of the oil refinery and paraxylene project in 2013,” she said. “But, since then, local media and social media have seldom reported its development. We’ve been blocked from information about the project.”

The refinery, in the town of Caopu, certainly looks impressive, with smoke pouring from several tall chimneys.

“The refinery is testing operations now,” one worker said outside the plant. “But we (workers) have no idea when it will really operate commercially to process oil.”

The authorities invited a few representatives of residents and environmental NGOs to attend a meeting in May, telling them the refinery would go into production later this year and that pollution would be strictly controlled, a representative of Green Kunming, a local NGO invited to the meeting, said. “But we were not allowed to take notes at the meeting and had to promise not to debate or raise worries in public,” he said. SOUTH CHINA MORNING POST