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China’s Belt and Road Initiative

  • Aug 11, 2021
  • 4 min read


What is the Belt and Road Initiative?


The Belt and Road Initiative (BRI) is a program established by the Chinese Communist Party (the CCP) and forms part of their foreign policy. The program aims to build relationships and strengthen economic links with countries in Asia and Europe via trade routes, financial links, and the creation of special economic zones. It covers both terrestrial and maritime trade routes, with ‘Belt’ referring to the land routes, and ‘Road’ referring to the maritime routes. During its seven-year run, the BRI has helped China form trade deals and financial agreements with other countries in the region. The program also focuses on building infrastructure in neighboring countries to help improve transportation.


Benefits for Recipients


For countries that decide to take part in the BRI, there can be numerous benefits from the investments which follow. A 2019 study conducted by the World Bank found that increased investment in infrastructure could reduce transport costs and travel time, making it quicker and cheaper to commute or transport raw materials, capital, and consumer goods. Moreover, the study calculated that, if the investments reach their full potential, the initiative could increase world trade by up to 6.2%, highlighting the increased efficiency of trade movements between China and its neighboring countries as one of the main aims of the BRI.


Another benefit for recipient countries is the creation of free-trade zones along the Silk Road (the land section of the Belt and Road). The creation of such zones would work alongside the new infrastructure projects to make trading an easier process for the countries involved. This demonstrates how the main goal of the BRI is to increase trade between the countries in Asia and Europe, which would bring in greater benefits for all involved.


Risks for Recipients


With any infrastructure project comes risks, and those which are part of the BRI are no exception. A major risk is an environmental damage, which is often a result of major infrastructure works. Upgrading transport systems can bring significant advantages to recipient countries, but this must be balanced by the risks to local ecosystems and the wider environment.


Moreover, there are political risks for recipient countries. Much of the BRI depends on diplomatic relations between countries and these are able to swiftly change. For example, the Malaysian government had agreed to become part of the BRI, however, the next Prime Minister, Mahathir Mohamad (2018-2020), as opposed to the project due to concerns about China’s rising levels of influence over Malaysia. In countries where relations with China have been prone to changes, there are risks involved with the BRI, as projects can require long-term commitment between countries to achieve their goals.


Benefits for China


Through the BRI, China has the potential to make significant economic and political gains. As with recipient countries, China would also benefit from the development of transport infrastructure in nearby countries. By reducing the costs of transporting goods, China could increase the trade volumes which pass through its borders, strengthening its economy in the process. By making further economic connections with Asian and European countries, China could increase its importance as an economic hub and trade partner due to its high access to infrastructure.


Politically, China may also make gains from the BRI. China’s numerous investments into other countries will create positive diplomatic relationships with them, making them more amenable to Chinese interests. An increase in economic links between countries will also tie their interests closer together, meaning China could benefit from an increase in political support from recipient countries.


BRI-Incurred Debt


Much of the funding for infrastructure projects is given in the form of low-interest loans, as opposed to an aid grant while requiring the use of specified Chinese building firms in infrastructure construction. This means, while the receiving countries gain the benefits of new infrastructure, this does not always translate into the creation of jobs for domestic laborers.


Through the BRI, the levels of foreign debt owed to China have risen since 2013, when the BRI was first proposed. Many critics of the BRI have interpreted this data to show China pursuing a harsh line of economic foreign policy, with the intention of trapping the recipient countries through debts to China - with infrastructure assets to be seized as a consequence of late debt payments. However, a recent study by Chatham House has found this interpretation to be misleading. It showed that the recipient countries engage with China in the planning and execution of the programs, with economic gain for all being the goal of the initiative.


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