On October 17-18, 2023, Beijing played host to the third Belt and Road Forum for International Cooperation on the occasion of the tenth anniversary of what is now known as the Belt and Road Initiative (BRI). Twenty-three foreign heads of state, including Russian President Vladimir Putin, attended the forum as well as other prominent leaders such as UN Secretary-General Antonio Guterres and the Secretary-General of ASEAN in order to discuss the progress made by the BRI in developing global infrastructure and the future of the initiative.
All of the G7 countries declined to participate in this year’s forum, and the only European Union head of state who attended was Hungarian Prime Minister Viktor Orban, in contrast to both of the previous fora (held in 2017 and 2019) which were attended by the Czech Republic, Greece, and Italy. However, this year’s Belt and Road Forum saw an increased attendance by representatives from across the Global South, including the heads of state from Pakistan, Indonesia, and Sri Lanka, all of whom did not attend in 2019.
Coverage of this year’s Belt and Road Forum was highly mixed, with most Western media sources focusing on allegations of “debt trap” diplomacy on the part of the Chinese government, but the key takeaway for attendees was that China has reiterated its commitment to the BRI going forward and a “leaner, greener” focus for the initiative as well as a greater emphasis on digital connectivity and reducing regulatory barriers to international trade.
The evolution of the BRI
What is now known internationally as the Belt and Road Initiative was launched in 2013 during a speech given by Chinese leader Xi Jinping in Kazakhstan. The name of the initiative was inspired by the Silk Road which was an economic corridor connecting China to Central Asia, the Middle East, and Europe during the period of Classical Antiquity.
Although 155 countries have reportedly participated in the BRI since its inception, China does not publish any hard figures or facts about exactly which projects are included in the BRI or how much money has been spent or loaned. Further contributing to the lack of clarity is that even government officials have expressed confusion about which projects are included in the BRI, such as the construction of the Pokhara Airport in Nepal, leaving outsiders dependent on Western think tanks and NGOs to make educated guesses about the size and scope of the BRI, estimated to be valued at $160 billion since 2013.
What is known, however, is that the BRI’s initial focus was on financing and building large-scale infrastructure construction projects such as ports, rail networks, airports, power plants, and roadways. Reliable reports have shown that as many as one-third of these projects experienced major problems, primarily related to inaccurate risk assessments and debt sustainability analyses on behalf of Chinese lenders, leading to several defaults and the restructure of debt payments.
This year’s Belt and Road Forum certainly continued to stress the importance of greater physical interconnectivity (through infrastructure construction and renovation projects), but the focus of the BRI has now shifted towards enhanced digital connectivity, training courses, the reduction of regulatory friction in multilateral trade, and increasing people-to-people ties.
BRI and development aid
Officially, China is still classified as a developing nation and remains a recipient of Official Development Assistance (ODA) from multilateral institutions such as the United Nations and countries such as the United States and Japan. However, at the same time, China has been providing its own ODA to other countries, some of which falls under the umbrella of the BRI.
Unfortunately, due to the same lack of transparency that plagues the BRI, it is extremely difficult to get specific data from the government in Beijing about the size and scope of China’s foreign aid program aside from periodic announcements about the provision of emergency humanitarian relief, such as after the recent earthquake in Afghanistan.
Moreover, unlike the traditional providers of the majority of the world’s ODA, which are all members of the Organization for Economic Cooperation and Development (OECD) and have mandatory reporting requirements, China has steadfastly declined to publish any figures about its own ODA or even information about the nature of what aid it is giving, framing its foreign aid strategy as less about being a “donor nation” and more about being a joint participant in South-South cooperation.
What is known, however, is that the lion’s share of the BRI is in the form of loans, most of which are concessional in nature. These loans come from a variety of sources, some of which are state-run institutions such as the China Development Bank and the Export-Import Bank of China, and some are from commercial lenders and private enterprises in China, making it hard to clearly separate official BRI projects from private business investments.
Although only rough figures can be ascertained through indirect means, experts estimate that China’s total foreign aid amounts to approximately $5 billion per year in direct assistance and approximately $67.8 billion in the form of loans and financial assistance, most of which falls under the umbrella of the BRI.
With an opaque reporting structure, it is extremely difficult to compare China’s BRI on an apples-to-apples basis to the ODA provided by Western donors.
BRI challenges
As the BRI will continue to develop physical infrastructure in the form of transnational transportation and energy generation projects, particularly in Africa and Central Asia, it is also expected to face challenges such as the non-payment of debts. While it is clear that some BRI recipients such as Pakistan and Sri Lanka have, indeed, struggled to pay off their debts to Chinese lenders, there is little evidence that the government of China has intentionally overloaded nations with debt in order to gain political or other concessions.
Furthermore, China’s growing economic ties with Russia have led to a downturn in Beijing’s relations with many Western nations that support Ukraine. The EU has recently called for increasing tariffs on Chinese-made electric vehicles.
Success stories
Despite some high-profile missteps, China can point to a number of successful BRI projects during the first decade of the initiative.
An estimated 10,000 Chinese firms, 90% of which are private, are now in operation across Africa. China is ranked the largest funder of infrastructure on the continent having completed such projects as a railway and water pipeline that connect Djibouti to Ethiopia, a new rail system in Egypt’s capital, a railway connecting Mombasa and Nairobi in Kenya, the construction of two major hydroelectric plants in Uganda, and a railway that connects Abuja to Kaduna in Nigeria.
Other BRI successes include the development of the first rail freight service connecting China to Europe via Iran, the revitalization of the port of Piraeus in Greece, and the construction of a railway line between Baku in Azerbaijan via the Republic of Georgia to Iran. The BRI has also expanded both rail and road connections across Central Asia, increasing the amount of goods now being transported between Mongolia, Russia, Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan, and China.
Several other BRI projects are underway, including a new rail service in Saudi Arabia to assist Muslim pilgrims during the annual Hajj, a road and train line between China and Laos (which connects onwards to Singapore), a rail project in Malaysia, a hydropower project in Argentina, and the construction of airports in countries such as Maldives, Kazakhstan, and Indonesia.
