The ambitious development program is now a pillar of an alternative global order
China this week celebrated the 10th anniversary of the launch of its Belt and Road initiative.
Originally designed to better integrate China with its neighbors and more distant trading partners, it has evolved into a much more ambitious project. Chinese President Xi Jinping’s signature initiative, BRI, is now a pillar of an alternative global order, a counter to the existing, Western-created and led paradigm.
That idea is popular among participating nations, but the initiative has been criticized for prioritizing China’s needs over those of its partners, burdening them with unsustainable debts and helping Chinese companies more than those of recipient nations, all of which Beijing denies.
It would be unfair, however, not to recognize the service China has done for the world by highlighting the lack of infrastructure in the developing world and forcing the West to match Chinese efforts to fill that gap.
The One Belt and One Road initiative, as BRI was originally known, was launched in a little noticed speech by Xi in Kazakhstan in 2013. He sought to rebuild the Silk Road, the ancient trade network that reached from China to Europe, and in so doing re-establish China’s place at the center of the global trade and economic order.
It focused on big infrastructure projects — the power plants, roads, ports and airports — that are prerequisites to development and global exchange. Open to all countries, it has primarily engaged emerging economies of the developing world, as they chaff against the restrictions that guide Western lending and as China seeks to sidestep sanctions created by geopolitical tensions with the West.
Since it was launched a decade ago, it is estimated that BRI has yielded $1 trillion in investments, despite the economic slowdown that accompanied the COVID-19 pandemic and the subsequent sluggish recovery in China.
Even as Beijing battles severe economic headwinds — lending has fallen about 40% from its 2018 peak — it is estimated that projects worth $40 billion have been launched under the plan this year alone. At the commemorative forum this week, Xi announced that the China Development Bank and the Export-Import Bank of China will set up 350 billion Chinese yuan ($48 billion) financing facilities, and add 80 billion yuan to the Silk Road Fund for projects “on the basis of market and business operation.”
Economic pressures are never likely to be determinative. BRI has been written into the charter of the Chinese Communist Party. An initiative that once focused on connectivity has become the cornerstone of a grand strategy that includes the Global Development Initiative, the Global Security Initiative and the Global Civilization Initiative to promote an alternative vision of global order, one that rejects key features of a world created by the West in the aftermath of World War II.
China's vision promises greater riches for more nations and more say for them in rulemaking. In an editorial, Xinhua News explained the logic and the appeal of the initiative: “It is no longer acceptable that only a few countries dominate world economic development, control economic rules and enjoy development fruits.”
That message has great appeal. More than 140 countries are part of BRI and some 1,000 representatives mostly from the developing world attended this week’s forum in Beijing. In the audience were roughly 20 heads of government, the most notable of which was Russian President Vladimir Putin, Xi’s most committed and energetic partner in the effort to rewrite the global order. Among the other world leaders in attendance were Indonesian President Joko Widodo, Cambodian Prime Minister Hun Manet, Thai Prime Minister Srettha Thavisin, James Marape of Papua New Guinea and Vo Van Thuong from Vietnam.
BRI is credited with lifting some 40 million people out of poverty. Critics also charge, however, that it has burdened recipient governments with crushing debt that Beijing has exploited to seize national assets. Even without the forfeitures, there are fears that BRI gives China outsize influence in the decision making of those governments. Other criticisms include charges that BRI projects destroy the environment or facilitate corruption.
China adamantly denies those criticisms — and has renegotiated or written off an estimated $78.6 billion in debt between 2020 and 2022 — but it has nevertheless shifted BRI lending to accommodate smaller, “smarter” projects, that are greener and more high-tech. So, for example, while initial BRI lending supported coal power plants, since 2020 no new coal projects have been announced and China has said that project developers must follow international environmental standards.
But China also deserves credit for forcing the West to better respond to the needs of emerging economies. BRI, like China’s Asian Infrastructure Investment Bank, was created to fill an alarming gap in development finance, a shortfall estimated at $1.5 trillion per year. Recognizing that Beijing’s initiatives could tilt the global alignment of forces, Western governments have struggled to match Chinese action. It is estimated, for example, that the World Bank Group has committed about $800 billion over the same 10-year period since the launch of the BRI.
Western governments put forward the Blue Dot Network, which aimed to establish a “Michelin-style” system of approved projects that investors could back. For all its ambition, it was based on the acknowledgement that the West could not match China dollar for dollar and instead would promote public-private partnerships for such projects.
That program proved to be more fancy talk than finance and has been followed by the Build Back Better World initiative, adopted by the Group of Seven leading industrialized nations, the European Union’s Global Gateway initiative and, most recently, the Partnership for Global Infrastructure and Investment. None have yet to mobilize either the political will or the money — the real test of seriousness — among Western governments.
The West must rise to this challenge. Infrastructure is key to the success of the developing world and the failure to help emerging economies meet this vital need will rightly tar the West in their eyes. It is not enough to criticize Chinese projects and note their shortcomings. Money must be put on the table and opportunities offered.
Japan has done so in the past. Tokyo has long based its regional engagement policy on a very pragmatic foundation: the need to materially advance its regional partners, ensuring that they see Japan also as a partner. As a result, Japanese aid, trade and investment have been instrumental in promoting development in Southeast Asian nations. China now is pursuing the same policy in pursuit of a larger vision.
JT