Beijing’s Belt and Road Is Failing the Hormuz Stress Test — And Canada Still Has $1 Billion Committed to Xi’s Infrastructure Bank

Op-Ed: Global Affairs Canada Officials Told MPs in Late October They Could Not Say Whether the AIIB Review Had Concluded.

By Mehmet Tohti

OTTAWA — For more than a decade, Beijing has sold the Belt and Road Initiative as the destiny of humanity — a vision of common connectivity and prosperity. Ports, railways and pipelines would bind Asia, Africa and Europe to China through several land corridors, the “Belt,” while the Maritime Silk Road, the “Road,” would carry Chinese goods outward and Gulf energy inward. Beijing even declared China a “near-Arctic state” to fold a Polar Silk Road into the design. Geography, finance and ambition would do the rest.

Since February 28, when the United States and Israel launched their air war on Iran, the world’s most important energy chokepoint, the Strait of Hormuz, has been largely shut. In early October, the International Monetary Fund’s PortWatch counted just four transits in a single day, compared with a pre-war norm of 85. Ships are being struck almost daily. The International Energy Agency calls it the largest energy security crisis the world has ever faced.

This is the stress test the Belt and Road was never designed to pass, and it is failing dramatically.

The failure reaches into Canada, too.

Ottawa still has close to US$1 billion committed to Beijing’s Belt and Road-style infrastructure bank, despite freezing its participation in 2023 after a Canadian insider, Bob Pickard, walked out and went public with allegations of covert Chinese Communist Party control over the multilateral lender, which is backed in part by Western taxpayers.

Roughly 40 percent of China’s crude imports came from the six Persian Gulf states in 2025. By June 2026, China’s imports had fallen to a decade low of 7.12 million barrels a day, down 41 percent from a year earlier. Russian supplies to China increased, and the initial shock was absorbed.

But absorbing a shock is not the same as commanding a trade route. The Maritime Silk Road’s most important leg now operates with the permission of Iran’s Revolutionary Guard. The Guard set up a “toll booth” off Larak Island, charging around $2 million per supertanker, payable in Chinese yuan. Chinese ships were waved through as “friendly” vessels, sometimes without paying the toll, with their passage timed to suit Tehran’s diplomacy. Others were turned back. The White House said Xi Jinping opposed the tolls at his May summit with President Trump, even as Chinese tankers kept passing with Iran’s blessing.

Meanwhile, much of the traffic that does move is protected by the United States Navy. China’s maritime road depends on the goodwill of a revolutionary militia and the protection of its chief strategic rival.

Beijing foresaw the vulnerability of maritime chokepoints and sought to answer it with a land alternative. Rail corridors from Korla in East Turkistan were meant to reach Iran, Türkiye and Europe, bypassing the reach of any navy. That was the plan.

The war has cut into that hedge too. Rail and road links running from Iran toward Türkiye and Central Asia have been disrupted or severed. In the Red Sea, Houthi attacks around the Bab el-Mandeb once again threaten the Suez route to Europe. The southern land corridor and the sea lane are failing at the same time.

The flagship new line, from Kashgar through Kyrgyzstan to Andijan in Uzbekistan, is still a construction site. It is expected to reach just 22 percent of planned work by the end of 2026, with a target opening of 2030. Today, China’s trains to Europe still cross Kazakhstan, then Russia or the Caspian.

And rail carries containers, not oceans of crude. No railway can replace the millions of barrels a day that tankers once brought from the Gulf.

If any initiative was meant to prove its value during this crisis, it was the Gwadar project. The $62 billion China–Pakistan Economic Corridor links Kashgar by road to a deep-water port about 600 kilometers east of Hormuz. On paper, it is the bypass Beijing always wanted.

In practice, Gwadar has become a temporary buffer, not a trade hub. Its port chairman celebrated receiving six diverted transshipment cargoes during the crisis, the first in more than a decade — a rounding error for a global gateway. Saudi and Kuwaiti discussions about storing oil there remain preliminary. A Pakistani port official identified the obstacle plainly: security.

A crisis that should have proved the corridor’s worth has instead exposed how little of it was ever built.

Worse for Beijing, its oldest partner — the country that once described its relations with China as deeper than ocean, sweeter than honey and stronger than steel — is hedging.

Since 2025, Pakistan has rebuilt its ties with Washington. Its army chief, Field Marshal Asim Munir, lunched with President Trump at the White House in June 2025 and returned with Prime Minister Shehbaz Sharif in September. Islamabad offered American access to its critical minerals and signed a $500 million rare earths deal with a US firm.

Then came the boldest move. Munir’s advisers proposed that the United States build and run a port at Pasni, about 110 kilometers east of Gwadar. The pitch reportedly cited “dual-use concerns” about Chinese ports. It envisioned some $1.2 billion in investment and a rail link to Balochistan’s mineral belt. Islamabad has not adopted it as official policy, and Washington has not said whether it accepts.

The country Beijing called its “iron brother” is offering its rival a harbor beside China’s flagship port. Gwadar was meant to anchor the Maritime Silk Road in a loyal client state. It now sits on a coast where Washington is welcome too.

Beijing assumed Central Asia was its uncontested hinterland. That assumption is also unraveling.

On October 17, Chinese Premier Li Qiang was in Tashkent, where Uzbekistan’s presidency put the portfolio of Chinese-backed projects at nearly $60 billion. The next day, US Secretary of State Marco Rubio landed in Samarkand, the ancient Silk Road city, for a C5+1 meeting with all five Central Asian foreign ministers. He brought more than 200 American business leaders with him.

The momentum began at the C5+1 leaders’ summit hosted in Washington on November 6, 2025. Around that summit, Uzbekistan pledged to buy and invest nearly $35 billion in American sectors over three years. Uzbek-American trade grew by a third in the first eight months of 2026.

The numbers still favor Beijing. But the message to Central Asian capitals is clear: they have alternatives for their long-term stability and security. The Kashgar–Andijan railway — Beijing’s principal overland route bypassing Russian transit — terminates in Uzbekistan, a nation increasingly courted by Washington. With these developments, China’s land routes no longer cross a secure sphere of influence, but rather contested ground once considered its backyard.

Washington should use that leverage for more than contracts. Central Asian governments have faced Chinese pressure to align their positions with Beijing’s on the Uyghur genocide, transnational repression and other issues. Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan have all, at various times, sent back Uyghurs who had fled persecution.

The Uyghur region shares international borders with eight nations — Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India — making it China’s primary land bridge to Central Asia, South Asia and the broader Eurasian landmass. The China-Kyrgyzstan-Uzbekistan Railway (Kashgar–Andijan), the China-Pakistan Economic Corridor to Gwadar, northern rail links through Khorgos and Alashankou into Kazakhstan, and Central Asian natural gas pipelines all converge on or originate within the Xinjiang Uyghur Autonomous Region, which its original inhabitants call East Turkistan.

As the sea becomes less reliable, the land becomes more precious to Beijing. That makes the region more central to China’s economic security, and its people more exposed. A regime that already treats Uyghur identity as a security threat will not loosen its grip on its most important transit corridor. The wave of decrees and legislation Beijing has issued over the past six months tightens that grip further, signaling the government’s acute sense of vulnerability there.

The world should understand what “connectivity” means on the ground from the experience of Uyghurs. The road west is being paved through a region of genocide, mass surveillance, internment, transnational repression and forced labor.

Three Years After Freezing Ties, Canada’s Capital Remains in Beijing’s Infrastructure Bank

Beijing built financial institutions to match its corridors. The flagship is the Asian Infrastructure Investment Bank (AIIB), launched in 2016 as Xi Jinping’s answer to the World Bank and the IMF.

In March 2018, Canada became the bank’s first North American member, committing to a total share subscription of US$995.4 million, which includes US$199.1 million in paid-in capital. The promise was lucrative contracts for Canadian firms, but few ever materialized.

In June 2023, the bank’s Canadian communications chief, Bob Pickard, resigned. He alleged that the bank was dominated by Communist Party members and served Beijing’s agenda. Ottawa froze all government-led activity and ordered a review. That December, it expanded the review and suspended Canada’s participation indefinitely.

In interviews with The Bureau, Pickard has argued that while the AIIB is not officially called a Belt and Road bank by Beijing, it operates within the Chinese Communist Party’s plans to boost the Belt and Road system.

More than three years later, Global Affairs Canada officials told members of Parliament in late October that they could not say whether the review had concluded. Canada’s capital still sits on the bank’s books in Beijing.

This limbo is the worst of both worlds.

Canada’s money remains tied up, while Canada has no meaningful voice in how it is used. Moody’s, which rates the bank, has noted that Canada holds only about 1 percent of its shares. Beijing does not need our capital. It values our name on its membership list.

The case for leaving is stronger now than it was in 2023.

The geopolitical premise behind Beijing’s connectivity project is crumbling, as Hormuz demonstrates. Some analysts are already warning that Ottawa’s warming ties with Beijing could lead to a quiet return. The bank’s own founding agreement allows a member to withdraw by written notice and settle its capital. Ottawa should finish the review, give notice and bring Canada’s money home. Then it should redirect that capital to partners and institutions that share our values.

The Belt and Road will not collapse. China has too much money, too many contracts and too much prestige invested in it to simply walk away. But the grand vision is gone.

What remains is something smaller and more defensive: a hedging network of stockpiles, alternate suppliers and unfinished corridors. Its sea lanes depend on other countries’ navies. Its land routes run through war zones and unstable states. Its showcase port still waits for traffic.

The initiative assumed a world of open seas, compliant partners and stable borders. That world no longer exists. Infrastructure cannot buy security, and loans cannot command loyalty in wartime.

For Canada and its democratic partners, the lesson is clear.

Do not mistake Beijing’s ambition for capability. End Canada’s limbo at the AIIB and bring our capital home. Do not allow “connectivity” to launder forced labor from East Turkistan into our supply chains. And invest in our own resilient, rules-based trade routes, where freedom of navigation is defended, not sold at a toll booth.

Mehmet Tohti is Executive Director of the Uyghur Rights Advocacy Project in Ottawa.