China’s Massive Belt and Road Initiative - article for the Council on Foreign Relations in New York

Updated: Aug 23, 2021

China’s colossal infrastructure investments may usher in a new era of trade and growth for economies in Asia and beyond. But skeptics worry that China is laying a debt trap for borrowing governments.


Written for the Council on Foreign Relations by Andrew Chatzky and James McBride


Last updated January 28, 2020


Summary

  • The Belt and Road Initiative, reminiscent of the Silk Road, is a massive infrastructure project that would stretch from East Asia to Europe.

  • Some analysts see the project as a disturbing expansion of Chinese power, and the United States has struggled to offer a competing vision.

  • The initiative has stoked opposition in some countries involved in Belt and Road that have taken on high levels of debt.

Introduction


China’s Belt and Road Initiative (BRI), sometimes referred to as the New Silk Road, is one of the most ambitious infrastructure projects ever conceived. Launched in 2013 by President Xi Jinping, the vast collection of development and investment initiatives would stretch from East Asia to Europe, significantly expanding China’s economic and political influence.


Some analysts see the project as an unsettling extension of China’s rising power, and as the costs of many of the projects have skyrocketed, opposition has grown in some countries. Meanwhile, the United States shares the concern of some in Asia that the BRI could be a Trojan horse for China-led regional development and military expansion. Under President Donald J. Trump, Washington has raised alarm over Beijing’s actions, but it has struggled to offer governments in the region a more appealing economic vision.


The article ends with these comments:


What is the role for third countries?


Other countries have sought to balance their concerns about China’s ambitions against the BRI’s potential benefits.


India. India has tried to convince countries that the BRI is a plan to dominate Asia, warning of what some analysts have called a “String of Pearls” geoeconomic strategy whereby China creates unsustainable debt burdens for its Indian Ocean neighbors in order to seize control of regional choke points. In particular, New Delhi has long been unsettled by China’s decades-long embrace of its traditional rival, Pakistan. Meanwhile, India has provided its own development assistance to neighbors, most notably Afghanistan, where it has spent $3 billion on infrastructure projects.


The United States views India as a counterweight to a China-dominated Asia and has sought to knit together its strategic relationships in the region via the 2017 Indo-Pacific Strategy. Yet, despite U.S. misgivings, India was a founding member of China’s Asian Infrastructure Investment Bank (AIIB), and Indian and Chinese leaders have invested in developing closer diplomatic ties. “India does a lot with China in the multilateral arena for its own reasons,” says CFR’s Alyssa Ayres.


Japan. Tokyo has a similar strategy, balancing its interest in regional infrastructure development with long-standing suspicions about China. In 2016, Japan committed to spending $110 billion on infrastructure projects throughout Asia. Japan has, with India, also agreed to develop the Asia-Africa Growth Corridor (AAGC), a plan to develop and connect ports from Myanmar to East Africa.


Europe. Several countries in Central and Eastern Europe have accepted BRI financing, and Western European states such as Italy, Luxembourg, and Portugal have signed provisional agreements to cooperate on BRI projects. Their leaders frame cooperation as a way to invite Chinese investment and potentially improve the quality of competitive construction bids from European and U.S. firms.


Others disagree. French President Emmanuel Macron has urged prudence, suggesting during a 2018 trip to China that the BRI could make partner countries “vassal states.” Other skeptics connect the BRI with climate change. The Institute of International Finance, a research group that analyzes risk for large Western banks, has reported that 85 percent of BRI projects can be linked to high levels of greenhouse gas emissions. Others claim that China is using BRI funds to gain influence in Balkan countries that are on track to become EU members, thereby providing Chinese access to the heart of the European Union’s common market.


Russia. Moscow has become one of the BRI’s most enthusiastic partners, though it responded to Xi’s announcement at first with reticence, worried that Beijing’s plans would outshine Moscow’s vision for a “Eurasian Economic Union” and impinge on its traditional sphere of influence.


As Russia’s relationship with the West has deteriorated, however, President Vladimir Putin has pledged to link his Eurasian vision with the BRI. Some experts are skeptical of such an alliance, which they argue would be economically asymmetrical. Russia’s economy and its total trade volume are both roughly one-eighth the size of China’s—a gulf that the BRI could widen in the coming years.


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A cyclist passes by construction cranes in Xi'an, China.


Zhang Peng/LightRocket via Getty Images


Recommended Resources


This CFR Independent Task Force report evaluates the implications of the BRI for U.S. interests and puts forward a U.S. strategy to respond to it.

This Financial Times report on the BRI explores the political controversies—inside and outside China—that it has produced.

This Vox video explains the enormous scale and potential geopolitical outcomes of the BRI.

The consulting firm McKinsey looks at how the BRI could reshape global trade in this 2016 podcast.

CFR’s Belt and Road Tracker shows how the BRI has changed countries’ bilateral economic relationships with China over time.

A National Bureau of Asian Research special report looks at how the BRI could affect China’s overall security strategy.

In Foreign Affairs, Yuen Yuen Ang discusses how the Belt and Road Initiative has evolved in recent years.

  • China

  • Belt and Road Initiative

  • Central Asia

  • South Asia

  • Europe and Eurasia

  • Trade

For media inquiries on this topic, please reach out to communications@cfr.org.

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