Over the last decade, Chinese economic problems, domestic indebtedness, and external critique have reshaped the BRI, thus, helping China cast itself as an alternative to the US
The recently concluded third Belt and Road Forum (BRF) in Beijing is a good opportunity to assess the workings of the Belt and Road Initiative (BRI) in its first decade and see where it is headed hereafter. The three Forums held till now are, in themselves, a barometer of the progress of the BRI. In 2017, the first BRF was attended by leaders of 29 countries. In 2019, the number shot up to 37, but, this time, only 23 attended. To an extent, the shifts reflect the geopolitical trends of the times and the challenges that the BRI itself confronts.
This also happens to be the 10th anniversary of the concepts put forward by President Xi Jinping in 2013, which were eventually named the Belt and Road Initiative—The Silk Road Economic Belt and the 21st Century Maritime Silk Road. To this, the Digital Silk Road has now been added. The initial thrust of BRI investments, now estimated at US$ 1 trillion, was hard infrastructure; state-owned Chinese banks and companies financed and built everything from power plants, railways, highways, ports, telecom infrastructure, and smart cities around the world.
But in the process, the BRI was criticised by many for promoting China’s selfish interests, encouraging corruption, and creating debt traps for indigent Global South countries. But the attendance at the recent BRF indicates that insofar as the Global South is concerned, the BRI remains a symbol of China’s rise and its global ambitions and an important means of filling their infrastructure deficits.
The White Paper issued by China on the eve of the third BRF sought to address many of the criticisms, which is encapsulated in this sentence: “The BRI is committed to open, green and clear cooperation towards inclusive and sustainable development.
However, over the last decade, Chinese economic problems and domestic indebtedness, as well as external critique have reshaped the BRI. The White Paper issued by China on the eve of the third BRF sought to address many of the criticisms, which is encapsulated in this sentence: “The BRI is committed to open, green and clear cooperation towards inclusive and sustainable development. It has zero tolerance for corruption and promotes steady and high-quality growth.”
In a report issued in 2021, AidData noted the “extraordinary expansion” of China’s overseas development finance programme in the first two decades of this century. With an annual commitment of US$ 85 billion, China was outspending the United States (US) and other major powers on a 2:1 basis, if not more. The study looked at 13, 427 projects worth US$ 843 billion in 165 countries over an 18-year period.
Another important finding was that debt was an issue and that the, “Chinese debt burdens are substantially larger than research institutions, credit rating agencies, or intergovernmental organisations with surveillance responsibilities previously understood.” The issue of debt has been an important one in critiquing the BRI. Yet, in some ways, it is also over-stated as a report of the Johns Hopkins University’s China Africa Research Initiative indicated. It is not the caricature portrait of a China that has been forcing countries to get indebted so as to exploit them. In many cases, it was the greed of Chinese lenders and corruption that led to projects being oversold.
Many of these issues had been taken up in the second Belt and Road Forum in 2019 and the Chinese government itself became aware of the problems with the megaprojects associated with the BRI. The outcome began a shift in the BRI’s approach. China began to understand that things need to change. The new watchword was “small and beautiful”, and an emphasis on low-investment, high yield projects. Another development is the new “Digital Silk Road”, focusing on telecom and digital infrastructure, which would benefit Chinese companies that are facing a Western ban on Chinese equipment.
Many of these issues had been taken up in the second Belt and Road Forum in 2019 and the Chinese government itself became aware of the problems with the megaprojects associated with the BRI.
A Council on Foreign Relations Task Force report noted in 2021 that COVID-19 had catalysed a shift ensuring that BRI was “likely to become a more slimmed down, cost-effective and technology-focused undertaking.” But the initiative was here to stay. A recent report of the Fudan University’s Green Finance Development Center noted the steady decrease of the average deal size from about US$ 617 million in 2022 to US$ 392 million in the first half of this year. “Compared to the peak in 2018, the investment deal size is 48 percent smaller,” the report adds.
There should be no doubt that, notwithstanding the criticism, BRI has been beneficial for China and its partners. As The Hindu noted, “Countries that have joined BRI have seen a jump in investment and trade with China.” It cited the White Paper, which noted that between 2013 and 2022, China’s trade with its BRI partners grew 6.4 percent annually reaching US$ 19.1 trillion while the total investment reached US$ 380 billion.
President Vladimir Putin was the chief guest at the third BRF, which was a signal of the economic and diplomatic support being extended by China to Moscow amidst the war in Ukraine.
This probably led to a marked decline in European attendance. Last time, in 2019, the leaders of the Czech Republic, Greece, Serbia, Switzerland, Belarus, Russia and Italy attended. This time, only Viktor Orban of Hungary and Alexander Vucic of Serbia participated. Putin’s presence may have been an issue but there is also a certain European scepticism towards Xi’s signature project as indicated by the planned withdrawal of Italy from the BRI.
But there was significant attendance of leaders from the Global South, with many belonging to our region—Prime Ministers Ranil Wickremesinghe of Sri Lanka, Joko Widodo of Indonesia, Srettha Thavisin of Thailand, Anwaar ul Haq Kakar of Pakistan, James Marape of Papua New Guinea, and Kenyan President William Ruto.
The theme of Xi Jinping’s speech inaugurating the third BRF was on just how China’s development and that of the world were interlinked “in a shared future”. The BRI, in that sense, was opening China’s doors to the world wider but the eventual goal was not just the modernisation of China, but the world itself.
Putin’s presence may have been an issue but there is also a certain European scepticism towards Xi’s signature project as indicated by the planned withdrawal of Italy from the BRI.
He also listed eight steps that outlined the new directions of the BRI:
New pilot zones for BRI commerce would be established, which would involve new Free Trade Agreements and investment protection treaties.
The BRI has endured a lot of criticism, especially on account of the lending practices of Chinese companies and the dubious benefit of projects to some of the recipients. Yet, overall it is difficult not to see that substantial gains have accrued to China on account of BRI, primarily in extending its influence globally. It is not just through the ports and railways, but in the attitudes of many countries of the Global South towards China.
Today, geopolitics and time have merged the BRI into China’s larger global vision encapsulated in the ideas of the Global Development Initiative, the Global Security Initiative, and the Global Civilisation Initiative. This is evident from the second White Paper that was issued in September before the third BRF titled “A Global Community of Shared Future: China’s Proposals and Actions”. China is now clearly casting itself as an alternative to the US and the West in setting up norms for the “fairer, multipolar world order” and the BRI remains its chosen instrument for the purpose.
Manoj Joshi is a Distinguished Fellow at the Observer Research Foundation
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Manoj Joshi is a Distinguished Fellow at the ORF. He has been a journalist specialising on national and international politics and is a commentator and ...
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