During the opening ceremony of the third Belt and Road Forum on 18 October 2023, President Xi Jinping remarked that “the original intention” (初心) of the “Belt and Road” Initiative (BRI) was to “take lessons from the ancient Silk Road” and over the past 10 years, he said “we have adhered to our original aspirations and worked hand in hand to promote the ‘Belt and Road’ international cooperation from scratch, which has since vigorously developed and achieved fruitful results.” The BRI cooperation has entered the “meticulous details” (工笔画) stage from the “general freehand brushwork” (大写意), and has expanded from “hard connectivity (硬联通) to soft connectivity (软联通)”. “What we have practised is interconnectivity, mutual benefit and reciprocity, and what we have pursued is common development and win-win cooperation. We do not engage in ideological confrontation, geopolitical games, or group political confrontations. We oppose unilateral sanctions, economic coercion, and decoupling and disruption of supply chains.”
The BRI along with many other initiatives pronounced as the global public good is a major flagship of China for international cooperation, primarily connecting the Global South.
Establishment of a Silk Road Fund with $54.40 billion, Development Bank of China, Export-Import Bank of China, Asia Infrastructure Investment Bank (AIIB) and the BRICS New Development Bank (NDB) where China has major stakes have been pronounced as financial institutions supporting the initiative. Xi Jinping revealed that during the Entrepreneurs Conference held on the sidelines of this summit forum, projects worth US$97.2 billion were signed. “The China Development Bank and the Export-Import Bank of China have pledged to set up a financing window of 350 billion yuan, and add 80 billion yuan of new funds to the Silk Road Fund to support the projects.”
A stock of the BRI in the last ten years tells us that the initiative has moved from five major goals—promoting policy coordination, facilitating connectivity, uninterrupted trade, financial integration and people-to-people exchanges—to a high quality and green development, what Xi Jinping prefers to call soft connectivity, mostly in the field of green and digital economy. According to the BRI portal, in 2022, the “friend circle” of the BRI countries has extended to 150 countries and 32 international organisations. China’s total export and import with the BRI countries reached $1.82 trillion, registering 20% growth over 2021. In the same year, contracted value of projects reached $98.19 billion. According to a report published by Christoph Nedopil Wang of Shanghai-based Green Finance and Development Centre (GFDC), since 2013, China’s cumulative BRI engagement amounts to $932 billion, about $561 billion in construction contracts, and $371 billion in non-financial investments. Oil and gas investments constituted about 80% of Chinese overseas energy investments and 66% of Chinese construction contracts. During the third forum, Xi Jinping revealed that in the next five years (2024-2028), China’s import and export volume of trade in goods and services is expected to exceed US$32 trillion and US$5 trillion respectively.
Ten major projects completed or under completion have been listed as: development of Greece’s main port, Piraeus; $300 million investment in Serbia’s state-owned Zelezara Smederevo steel plant; the China-Belarus Industrial Park; water supply project in Senegal; US$6 billion Lao-China Hi-speed Railway; construction of central business district (CBD) of Egypt’s new administrative capital; China Europe Railway Express that operated 15,162 trains in the first 11 months of the 2022, passing through 24 countries and 204 cities; construction of $1.4 billion Colombo Port City; the Orange Line Metro Train (OLMT) built under the framework of the China-Pakistan Economic Corridor (CPEC) in Lahore; and $4.7 billion Santa Cruz Hydroelectric Project in Argentina. Other major projects that have been completed are construction of the Jakarta-Bandung High-speed Railway, the Gwadar Port and Djibouti-Addis Ababa and Mombasa-Nairobi railways.
Undoubtedly, these massive projects have contributed to the local development and provided employment opportunities to thousands of people. However, these have also raised various concerns, some genuine and some geared towards demonising China. For example, in Piraeus, China holds 67% of the shares and could determine the fate of the port. Heavy investment and borrowings have made it difficult for smaller countries to service their debt. Laos’ public debt has reached 88% of its gross domestic product. The case of Colombo Port City is no different, China has been given 43% of stakes and a 99-year lease. In Argentina, the environmentalist fear that China-funded dam could disrupt key Argentine glaciers and biodiversity.
Conversely, Chinese scholars have refuted the “debt trap” theory of the West. Quoting the RAND Corp research report on the BRI, Liang Haiming, Director of Hainan University BRI Research Institute argued during the third BRI Forum in Beijing that the “BRI railway projects have led to a 2.8 percent increase in exports for participating countries.” He further posited that “studies have shown that BRI transportation infrastructure projects, have reduced logistics time by 1.2 percent to 2.5 percent in surveyed countries, lowered global trade costs by 1.1 percent to 2.2 percent, and contributed to a global income increase of 0.7 percent to 2.9 percent. These findings provide solid proof of the positive economic effects of Chinese investments in BRI projects. Citing figures calculated by the Indonesians, he said, “the first High-Speed Railway in Indonesia is expected to generate over $23 billion in revenue over the next 40 years.” Therefore, that BRI has brought opportunities and mutual growth to participating economies, not the debt traps, argues Liang. Nevertheless, there has always been a trade-off between the development and ecological protection, and since China is willing to undertake such development projects, developing countries seems to find them as “game changers” for their development.
Notwithstanding the challenges and concerns, China has demonstrated the will and purpose to invest and complete these projects across the continents. China’s BRI footprints in Asia, Europe, Africa and Latin America have forced the United States and its allies to counter the BRI with their own projects. Some of the initiatives such as the Asia-Africa Growth Corridor (AFGC) (2017), Indo-Pacific Infrastructure Forum (2018), Build Back Better World (B3W) (2021), EU’s Global Gateway strategy (2022) and the recent India Middle East Economic Corridor (IMEC) have been launched to counter China’s influence. These have been projected as part of a “liberal and values-based order” that intends to bring in “transparency” and “high quality” to the projects. However, some of these such as AFGC have remained nonstarter for the want of investment. As regards the B3W, the US argues that “it will collectively catalyse hundreds of billions of dollars of infrastructure investment for low- and middle-income countries in the coming years.” EU’s Global Gateway strategy looks more promising, wanting to mobilise up to EUR 300 billions of investment over the period 2021-2027. Given China’s massive investments in the BRI projects, the commitment from developed world appears too little too late.
Moreover, China’s economic integration with Asia, Africa, Central Asia, Europe and America far exceeds that of the US and its allies, China is better placed to strategize its investment, especially in developing counters, for Chinese enterprises according to Prof Chen Shouzhen of Xiamen University “not only occupy a dominant position in labour-intensive industries such as food, textile, leather, footwear, wood, and paper, but also occupy an important position in capital-intensive industries such as electronics, electrical, chemical, metal, machinery, and transportation.” This is what China calls having developed massive production capacities which no other country can match at this point in time. The new BRI projects have become “small and beautiful” (小而美) which are integrated to new technologies such as e-commerce, big data, cloud computing and artificial intelligence to enhance efficiency and efficacy of the projects. Meanwhile, we will see China accelerating the construction of free trade pilot zones, cross-border and economic cooperation zones etc. along the Belt and Road countries for promoting regional economic integration. Xi Jinping has rolled out an eight-point action plan for strengthening the BRI cooperation. These are: promoting a three-dimensional interconnectivity network, an open world economy, practical cooperation, green development, scientific and technological innovation, people-to-people exchanges, a path of integrity, and perfecting the BRI international cooperation mechanism.
Finally, notwithstanding China turning to the “small and beautiful” approach, the BRI is here to stay. For the simple reasons that the BRI is one of the flanks of China’s “New Type of International Relations” paradigm, and the latter one of the two pillars of China’s foreign policy. The other pillar is “to build a community with a shared future for humanity.” New ideas such as Global Development Initiative (GDI), Global Security Initiative (GDI), Global Civilization Initiative etc., have been added to this larger framework. Above all, these all converge to only one idea, the Chinese dream of national rejuvenation.
B.R. Deepak is Professor, Center of Chinese and Southeast Asian Studies, Jawaharlal Nehru University, New Delhi.