New beginning or dismal end for the Belt and Road?
Not so long ago, countries were ecstatic about the potential of China’s Belt and Road Initiative (BRI), a mega-infrastructure scheme launched in 2013 that would connect the world through ports, power grids, railways, roads and telecommunications networks.
Western pundits worried that BRI projects were pulling countries into China’s orbit, empowering Chinese companies and birthing a Sinocentric global order.
For many, it was obvious the road was speeding along as “evidenced” by China’s investments, loans or grants ranging from hundreds of billions to, supposedly, the low trillions of dollars.
Commentators often mixed distinct kinds of monies, classifying loans to countries like Venezuela as BRI loans, equating money invested in or lent to BRI participant countries as BRI money, or labeling projects with no connectivity features as BRI projects. China facilitated these misjudgments by not producing an authoritative BRI project list.
The BRI, initially consisting of the land-based Silk Road Economic Belt and the Maritime Silk Road Initiative, only raised more concern as it repeatedly broke geographic boundaries, reaching into the Pacific Islands, the Arctic and even outer space.
But one current refrain is that the BRI is falling short of its goals. In fact, before the Third BRI Forum held in Beijing in October 2023, some analysts proclaimed the BRI’s downfall. One only need look at Kenya, Pakistan, Sri Lanka, Zambia and perhaps Malaysia to see the dismal state of the BRI.
Italy has opted out and Greece is allegedly no longer enthusiastic, despite the successes of Athens’ BRI-linked Piraeus port. Driven by domestic economic constraints, financial problems with BRI participants and project loans, as well as political pushback from the West, BRI investment and contracting are shrinking.
Facing an uncertain future, another popular contemporary refrain is that the BRI is being rebooted. Beijing has shifted towards what analysts characterize as a “smaller, greener and more beautiful” initiative featuring solar and wind power, ICT infrastructure and ports.
As for the supposed geopolitical ambitions embodied within the BRI, the situation looks rather bleak for China with fewer heads of state attending the October 2023 BRI Forum.
It is easy to paint the current state of the BRI as off-course when it is measured against aspirations it was never likely to reach. Those analyzing the BRI have long pointed out that the complexities of infrastructure, as well as the economic and political shortcomings of numerous BRI participant countries, would adversely affect the BRI’s progress.
Domestic political changes flowing from elections, center–local divides, civil war, terrorism and public protests have time after time stunted, delayed and prevented the realization of BRI projects.
A “smaller, greener and more beautiful” BRI will come against these challenges, which will be coupled with China’s economic downturn, the financial situation of some BRI participants and European disinterest or opposition.
Many of the factors that powered the BRI in the past will continue to power it in the future. China has long been seeking greater market access, pathways to acquire natural resources and ways to improve the security of its resource and trade flows.
As well, Beijing has long searched for ways to deploy its massive foreign currency reserves, internationalize its currency, create opportunities for its companies and promote Chinese tech and standards.
These impetuses will continue to drive the BRI and one that is not necessarily small, green or beautiful. To think that green and ICT-related infrastructure projects will be small ignores reality — green energy projects can easily run into the billions of dollars and hydropower, while green in theory, is not necessarily “beautiful” or entirely non-polluting.
The BRI is not all about “push.” There remain dozens of countries such as Cambodia, Greece and Malaysia continuing to welcome traditional, large-scale BRI projects. The BRI is also much more than Africa or South Asia — the Middle East, for instance, is a place where the BRI will thrive.
The future of the BRI likely will entail a mix of big and small, green and polluting, beautiful and ugly. The key for businesspeople and policymakers is to ignore the generalizations present in many discussions about the BRI. Instead, they should undertake nuanced analyses attentive to regional and national political and economic conditions as well as sectoral dynamics.
They also need to be cautious about making decisions based on the data points of the day as opposed to larger trends that will affect their countries or companies over the medium- to long-term. Only then can policymakers and businesspeople take a smart and targeted approach in dealing with the BRI.
Jean-Marc F Blanchard is Executive Director at the Mr & Mrs S.H. Wong Center for the Study of Multinational Corporations, Palo Alto, United States.
This article was originally published by East Asia Forum and is republished under a Creative Commons license.
