What is China’s Belt and Road Initiative (BRI)?

Explaining China’s motives for the BRI, perception of the initiative internationally, and how the Belt and Road may evolve in the future.

Explainer Updated 19 December 2022 Published 13 September 2021 7 minute READ

China’s Belt and Road Initiative (BRI)

The BRI is an ambitious plan to develop two new trade routes connecting China with the rest of the world. But the initiative is about far more than infrastructure.

It is an effort to develop an expanded, interdependent market for China, grow China’s economic and political power, and create the right conditions for China to build a high technology economy.

Why create the Belt and Road?

There are three main motivations for the BRI. The first, and most discussed internationally, is China’s rivalry with the US. The vast majority of Chinese international trade passes by sea through the Malacca strait off the coast of Singapore which is a major US ally. The initiative is integral to China’s efforts to create its own more secure trade routes.

There is no doubt that China’s intention is also to make participating nations interdependent with the Chinese economy, and thereby build economic and political influence for China.

In that respect it has similarities with the Marshall Plan that followed the Second World War – but with the essential difference that China dispenses funding to other nations based purely on shared economic interests.

The second key reason for the initiative is the legacy of the 2008 financial crisis. China’s government responded to the emergency with a ¥4tn stimulus package, issuing contracts to build railways, bridges, and airports, but saturated the Chinese market in the process. The Belt and Road framework provides an alternative market for China’s vast state-owned companies beyond the borders of China.

Finally, the Belt and Road is seen as a crucial element in the Chinese government’s efforts to stimulate economies of the country’s central provinces, which historically lag behind richer coastal areas. The government uses the Belt and Road to encourage and support businesses in these central regions, allocating budget generously, and encouraging businesses to compete for Belt and Road contracts.

Why is it called the ‘Belt and Road’ initiative?

The Belt and Road Initiative is a relatively new name. Initially it was referred to as two separate projects, then as the ‘One Belt, One Road’ initiative, then finally as the Belt and Road Initiative.

The Belt

The Silk Road Economic ‘Belt’ element refers to plans for a revitalized series of ancient overland trading routes connecting Europe and Asia to be built largely with Chinese expertise. The idea was first proposed by Chinese president Xi Jinping during a visit to Kazakhstan in 2013, and central Asia is seen as the most vital region for the ‘Belt’ element.

The Road

In 2014 Xi Jinping outlined plans to additionally establish new sea trade infrastructure along the old Marco Polo route – a maritime silk road connecting China, Southeast Asia, Africa, and Europe. This would be a longer route avoiding the Malacca Strait, incorporating fuelling stations, ports, bridges, industry, and infrastructure through Southeast Asia and into the Indian Ocean. Pakistan is seen as perhaps the most crucial partner country in this effort through the China Pakistan Economic Corridor project.

The Belt and Road Initiative map

The Belt and Road Initiative in Asia

China views the BRI as vitally important in securing its borders on the Asian mainland. It has land borders with 15 nations, including unstable states such as Afghanistan and nations seeking new partnerships in opposition to the US, such as Russia. Belt and Road investments are viewed as a way to facilitate China’s ‘periphery diplomacy’ – trade and infrastructure partnerships with the countries along this enormous land border.

The idea of the Belt and Road forming a China-led block in opposition to the US is not necessarily accurate.

However, the idea of the Belt and Road forming a coherent China-led block in opposition to the US is not necessarily accurate.  Russia may not be a viable partner as it sees former Soviet Union states such as Kazakhstan, Kyrgyzstan, Uzbekistan, and Turkmenistan as belonging to its own sphere of influence, and China’s proposed Belt challenges Russian power in the region.

Other serious opponents to the initiative in Asia include India as a key partnership in the Belt and Road is between China and Pakistan, a nation China calls a ‘all-weather friend’. The China-Pakistan Economic Corridor runs close to the disputed Kashmir region, creating an alliance of two nuclear armed neighbours forging territorial links on India’s northern border.

The Belt and Road Initiative in Malaysia

Malaysian projects played a key role in feeding the narrative that the BRI is synonymous with corruption. Former Malaysian prime minister Najib Razak signed the East Coast Rail Link (ECRL) infrastructure deal with China, part of a broader Belt and Road vision of a united Southeast Asian railway network.

The scheme became associated with a broader corruption scandal involving Razak and was cancelled. However, Malaysia has not rejected the initiative or ruled out further involvement, and the ECRL issues are largely perceived as merely local corruption.

The Belt and Road Initiative in Africa

China’s banks have funded numerous projects in Africa, including a major gas pipeline and railways in Nigeria, plus projects in Uganda, Egypt, Ethiopia and many other countries.

The Belt and Road Initiative in Kenya

The centrepiece of the Kenyan government’s participation in the initiative is a high-speed railway running between Mombasa and Nairobi, the first high-speed railway on the African continent.

Built by the Chinese, the project has provided jobs and training for a local workforce to operate the railway – but also created serious questions about the country’s ability to service the Chinese loans which paid for the railway and Kenya’s broader debt obligations to China.

The Belt and Road Initiative in Europe

One of the aspects of the Belt and Road Initiative that most alarmed western commentators is its extension of Chinese influence into developed European nations such as Greece and Italy, a G7 nation.

The Belt and Road Initiative in Greece

Following the 2008 financial crisis, Greece suffered a prolonged period of economic instability and worsening relations with the European Union. In 2016, China’s shipping firm, Cosco purchased a majority stake in the Piraeus port, Europe’s seventh biggest harbour. Then in August 2018, Greece announced it was formally joining the BRI.

The Belt and Road Initiative in Italy

In March 2019 a populist coalition government led by the Five Star Movement agreed to bring Italy officially into the Belt and Road Initiative, signing a memorandum of understanding with Xi Jinping in Rome. Italy and Greece’s participation in the Initiative alarmed the US.

However, the Italian collaboration remains thin on actual detail, with the memorandum of understanding full of warm diplomatic language and acknowledgements of existing collaborations. Further, Mario Draghi, prime minister of a new government in 2021, signalled Italy may withdraw from the initiative.

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The Belt and Road Initiative debt trap

‘Debt trap diplomacy’ is the accusation that China uses Belt and Road as part of a manipulative global strategy, funding major infrastructure projects in developing nations with unsustainable loans, then using the debt to gain leverage over those governments.

The accusation was sparked by projects such as the Hambantota Port Development in Sri Lanka. The Sri Lankan government was unable to service the Chinese loans which funded the project, and the port was handed to the Chinese on a 99-year lease in 2017 – echoing tactics employed by 19th century European Imperialists against Qing dynasty China.

The port provides the Chinese with a major new piece of infrastructure and a strategic foothold in the Indian Ocean.

However, although it benefits Chinese interests, the port was conceived as part of a Sri Lankan strategy and the misconduct and incompetence of local elites played a crucial role in its failure.

It is important not to think of the Belt and Road as a unified, coherent strategy, but rather as a fragmented collection of bilateral arrangements made on different terms. This is illustrated by the fact that governments receiving Chinese loans are not always sure which authority in China they are dealing with.

Fifteen different Chinese government ministries claim some responsibility for Belt and Road projects; Chinese provinces have their own competing agendas, businesses and projects; Chinese diplomats sign up client governments to major projects in order to demonstrate loyalty to the party as opposed to promote a viable project; and even the Chinese central government is still unable to produce a list of what projects are part of the BRI and which are not.

This is part of a wider issue of the opaque nature of the Belt and Road and the loans on which it is built. The Chinese government has never published detailed information about the size and terms of Belt and Road loans. This vacuum of information feeds confusion and mistrust.

Why democracies are turning against the Belt and Road Initiative

The initiative is largely treated with suspicion in the US and its major allies, characterized largely in terms of debt trap diplomacy, as a predatory, opaque enterprise, and as a threat to Western interests.

Democracies have been slow and uncoordinated in their response to the BRI

However, democracies have been slow and uncoordinated in their response to the BRI. A unified proposal only came in the aftermath of the COVID-19 pandemic at the 2021 G7 summit where a joint ‘Build Back Better World’ communique proposed an alternative infrastructure initiative driven by the major Western democracies.

How successful this can hope to be, coming eight years after the Chinese began their Initiative, and at a time of inward thinking by democratic governments, remains to be seen. But fears that the Belt and Road symbolises an inevitable establishment of a new, Chinese-led world order may be premature. The initiative is still relatively young and the opaque nature of its funding makes it difficult to assess its success.

Who is funding the Belt and Road Initiative?

The Chinese state is the underwriter for the initiative, via its four state-owned banks lending to state owned enterprises. Other governments have criticized the Belt and Road for the lack of private sector participation but there is little enthusiasm for the initiative from even the Chinese private sector due to the lack of return on investment.

How much does the Belt and Road Initiative cost?

It is difficult to estimate the cost of the BRI due to the lack of transparency around its funding but notably Beijing has not pledged any new state capital to the initiative since 2019.

Worsening relations with the US have caused Beijing to rethink its approach to the initiative and the risk involved.

Ambitions have been scaled back to China’s immediate sphere of Southeast Asia, South Asia, and Central Asia, with less investment in Europe and Latin America.

What is the Belt and Road Initiative’s infrastructure?

There are many projects in the Belt and Road but two leading prestige projects stand out. The China-Pakistan Economic Corridor consists of bridges, railways, energy installations, a redeveloped highway, and expansion of the Pakistani port of Gwadar. It is considered the leading part of the Belt element.

The China-Europe express railway is another prestige achievement credited to the Belt and Road Initiative as this cargo railway has slashed delivery time from China to Europe to 15 days.

The future of the Belt and Road Initiative

Following the COVID-19 pandemic Chinese state banks directed more support to projects at home, echoing the behaviour of much of the rest of the world. Internationally, China has drawn in the scope of its ambitions to projects along its enormous border and in Southeast Asia. Investments abroad have declined considerably since a peak in 2015.

In September 2020 Xi Jinping announced China would seek to peak its CO2 emissions before 2030 and achieve carbon neutrality before 2060.

This has real implications for Belt and Road investments, although China continues to invest in coal alongside considerable new investment in renewable energy sources such as wind and solar.

The next decade will show to what extent the Belt and Road will drive green infrastructure, industry, and energy solutions, and its development will also provide a much clearer picture of the implications of the BRI for the rest of the world.