Written by Christian Potts
The Belt and Road Initiative (BRI) is a massive international infrastructure and economic development program that China began in 2013. The $1 trillion and decade-long project has expanded China’s global economic influence by increasing international dependency on their financial institutions. The BRI continues to grow, with “147 countries …hav[ing] signed onto projects or indicated an interest in doing so” (McBride, 2023). Chinese Communist Party leader Xi Jinping created the BRI to connect Asia’s economy to Europe’s through land routes, leading many to tout the initiative as “the 21st century’s Silk Road”(McBride, 2023). Since then, the BRI has ballooned into a global effort to increase the interconnectedness of Afro-Eurasia through infrastructure and trade (McBride, 2023). The BRI has funded, among many other things, highways in Algeria, electric trains in Egypt, hydroelectric plants in Uganda, railways in Azerbaijan, and the Piraeus shipping port in Greece (Jie, 2021). This expansive global influence is unmatched by lending institutions, except massive transnational institutions like the International Monetary Fund (IMF) and the World Bank, which have 190 and 189 member states respectively. The Belt and Road Initiative has profound implications for global geopolitics, especially in developing countries, which are the central focus of BRI investments. It is constantly becoming a more imposing force on the world stage as its investments become larger in size and scope.
Asia and Africa constitute most of BRI’s investment, with 67% of its lending power allocated to the two continents (Investments in the Belt and Road Initiative, 2023). China’s principal investment has been in Pakistan , at over 60 billion USD (McBride, 2023). The lending practices of China through the BRI have been described as predatory by many Western states and have a reputation for leaving borrowers in a “debt trap.” A debt trap is a situation in which a borrowing country is forced to take out loans to cover payments on previous loans. Whether or not China is actually practicing so-called “debt-trap diplomacy” is disputed, though (Brautigam & Rithmire, 2021). China has become, through the BRI, the world’s largest official creditor, capable of recalling its loans in an instant (Gelpern, 2021). French President Emmanuel Macron warned European nations that the BRI could lead to partner countries becoming Chinese “vassal states” (Rose, 2018). Despite this sentiment, over two-thirds of European nations have signed onto the program, expanding China’s economic and political influence to many of the United States’ allies, such as Italy and Greece (McBride, 2023).
The American response to the BRI was the Build Back Better World Initiative, spearheaded by President Joe Biden’s administration (B3W). Although it originated from the United States, the wealthiest nation by GDP, B3W lacked the financing to compete with the BRI (Sacks, 2023). Because of this, the initiative pivoted to align more with institutions like the IMF or World Bank, rebranding itself as the Partnership for Global Infrastructure and Investment (Sack, 2023). In 2021, the EU launched its counter to the BRI, called Global Gateway, which had an investing power of 300 billion Euros (355 billion USD). Although larger than B3W, critics still call Global Gateway’s influence a “drop in the ocean” compared to BRI’s, as many of the projects funded by it “would likely have happened anyway” (Barbero, 2023). Rather than allocating new funds, Global Gateway draws from existing funds destined for overseas investment and attaches social and environmental impact restrictions on them for borrowing countries (Barbero, 2023).
The primary goal of the Belt and Road Initiative is to aid in the industrialization of developing countries through targeted investments meant to foster alliances and trade connections as those countries develop (McBride, 2023). Such investments are streamlined by China’s centralized government, which can lend considerable sums of money with relatively little pushback or regulatory oversight (Blinken, 2022). Western countries are threatened by this, as it portends the expansion of China’s global sphere of influence and trade supremacy. Wealth-building programs funded by the BRI can intertwine an ever-growing consumer base in developing countries with the dominant production might of China, leading to new and exclusive trade relationships. A significant concern is that these developing countries will become so deeply indebted to the BRI that they will be unable to maintain stable trade relations with any country other than China, on whose continuing credit they will be dependent.
The BRI’s investments, unlike the EU’s Global Gateway, do not make specifications regarding environmental or social sustainability. Consequently, 63% of energy investments made through BRI went to funding fossil-fuel-related projects (Wang, 2023). This propensity conflicts with the general “net-zero” trend that Western countries are pursuing. Global environmental initiatives are made more difficult by this funding because Chinese investments seem to increase the rate and quantity of harmful carbon emissions produced globally (Tiseo 2023).
BRI investments weave developing countries into global trade networks, leading to lower prices for commodities and more robust domestic economies. Infrastructure projects are known to alleviate poverty, reduce the total cost of trade, and build economies of scale whereby the borrowing country can produce its consumer goods in bulk and at lower prices (Schneidman, 2016). Ideally, the economic benefits of borrowing from the BRI are sufficient to repay the loans, but this is not always the case. When a borrowing country fails to repay a loan for a project, China assumes ownership of it and its economic output, as has happened with Sri Lanka’s Hambantota International Sea Port (Ezrati, 2022).
In its first decade, The Belt and Road Initiative has already become an incredibly influential program on the world stage. It has funded major infrastructure projects in developing countries, promoting economic growth and increased global trade, but it runs counter to many Western interests. At this time, the BRI shows no sign of decline and is likely to become an even more significant force influencing global geopolitics in the next decade and beyond (Umbach, 2022).
References
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Brautigam, D., & Rithmire, M. (2021, February 6). The Chinese “Debt Trap” Is a Myth. The Atlantic. https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/
Ezrati, M. (2022). China’s Vaunted Belt and Road Initiative Seems to Have Come A-Cropper. Forbes, Forbes Magazine.
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