China’s Belt and Road Initiative: World leaders convened for the third Belt and Road Initiative (BRI) forum in China last week, marking the BRI’s 10th anniversary. The BRI, a massive trillion-dollar connectivity project launched by Xi Jinping, is undergoing significant changes, with China aiming for smaller and greener projects in response to criticism over debt burdens and environmental concerns associated with the initiative.
Despite these changes and mixed feelings surrounding the BRI, representatives from over 130 countries attended the forum, and major business deals were announced with nations such as Ethiopia, Egypt, Thailand, and Chile. The BRI is increasingly seen as part of China’s strategy to create alternatives to the U.S.-led global order amid escalating U.S.-China rivalry.
To understand the BRI’s evolution and its role in Xi’s broader foreign policy vision, let’s look at how it has changed over the last 10 years.
Belt & Road Initiative’s evolution
Launched in 2013, the BRI aimed to expand Chinese exports of infrastructure goods and services, creating trade networks and diplomatic relations while serving strategic goals. Initially focused on Central and Southeast Asia and Europe, the initiative quickly expanded to encompass most of Africa, Latin America, and some Western partners. However, it maintains a primary focus on the Global South, promoting narratives of South-South cooperation and “win-win” deals.
Contrary to the perception of a coordinated plan, the BRI lacks a formal budget and offers no guarantees of financing. China created the Silk Road Fund to finance BRI projects, and it has financed 75 projects worth $22 billion. However, the China EXIM Bank and the China Development Bank (CDB) also play pivotal roles by offering export credits, thereby merging export finance with diplomatic and strategic objectives.
Data shows that China EXIM and CDB lending to Africa and Latin America started decreasing around 2016, with fewer disbursements annually between 2017 and 2023. Growing debt defaults among some of the world’s poorest nations, coupled with unsustainable debts to China, led to reduced lending. The BRI was perceived to be winding down, but China’s recent announcement of new loans to BRI countries via the China EXIM Bank and CDB indicates continued significance.
Diplomatic and strategic focus of BRI
The BRI is primarily a diplomatic initiative aiming to strengthen bilateral relations, boost Chinese exports, and improve recipient countries’ economies. But it also serves China’s strategic objectives, reducing constraints on its geopolitical and economic rise under the U.S.-dominated international order.
When the BRI was launched in 2013, China was responding to the Obama administration’s Asia Pivot and increasing U.S. resources in the Western Pacific. Wang Jisi, a Chinese strategist, proposed China’s “march West” strategy to boost development in its western regions, creating new transportation infrastructure for Eurasian integration.
Moreover, the BRI represents bilateral relationships between China and host countries. While promoting economic goals, it supports Chinese firms entering new markets, advances strategic objectives, and deepens ties with countries traditionally within U.S. spheres of influence.
The BRI’s diplomatic role extends beyond infrastructure and financing; it positions China as a leader on Global South issues. At this year’s BRI forum, Xi proposed global governance of artificial intelligence, emphasizing “equal rights” to technology for development. Other initiatives like the Global Development Initiative challenge international American leadership, offering an alternative future rooted in “Chinese wisdom.”
Understanding India’s absence from BRI..
India’s absence from the 3rd BRI Summit was not unexpected, as New Delhi has been consistent in its position on the BRI. India continues to boycott China’s Belt and Road Initiative (BRI) summit, highlighting concerns about sovereignty issues in the China-Pakistan Economic Corridor (CPEC) that traverses Pakistan-occupied Kashmir and the financial viability of China’s projects in smaller nations. The BRI Forum for International Cooperation (BRFIC) convened by China has faced criticism over loans for projects that have resulted in unsustainable debt for countries like Sri Lanka. India has consistently expressed reservations about the BRI, emphasizing the need for universally recognized international norms, good governance, transparency, and financial sustainability. Concerns grew following China’s lease of Sri Lanka’s Hambantota Port in a debt swap in 2017. China, however, is pushing ahead with the project despite indications of downsizing investments and calls from recipient countries to restructure debt.
Factors influencing India’s stance on BRI
1. Sovereignty Concerns: India remains cautious about the BRI’s flagship project, the China-Pakistan Economic Corridor (CPEC), which passes through Pakistan-administered Kashmir. New Delhi asserts that CPEC infringes upon its sovereignty.
2. Transparency and Accountability: India has expressed concerns about the lack of transparency and financial sustainability in BRI projects. The absence of detailed project reports and unclear financing mechanisms remain points of contention.
3. Geopolitical Tensions: Ongoing geopolitical tensions between India and China, particularly along their shared border, further complicate any participation in initiatives like the BRI.
4. Alternative Initiatives: India has been actively promoting its own connectivity initiatives, such as the International North-South Transport Corridor and the Asia-Africa Growth Corridor. These initiatives are seen as alternatives to the BRI.
5. Regional Dynamics: India’s relationships with countries like the United States and Japan, which have expressed concerns about the BRI, also influence its stance.
The Belt and Road Initiative has evolved over the last decade, balancing diplomatic, economic, and strategic goals. As the world watches the BRI’s transformation toward “smaller” and “greener” projects, it remains a cornerstone of China’s foreign policy and global engagement.