China is commemorating the tenth anniversary of the Belt and Road Initiative. On Tuesday, China began a conference celebrating the 10th anniversary of its Belt and Road Initiative, an ambitious but contentious effort to improve global connectivity and trade with Chinese money and infrastructure construction know-how.
The high-profile event, which takes place in the shadow of an escalating conflict between Israel and Hamas, is being attended by world dignitaries, including Russia’s Vladimir Putin.
Since its inception in 2013 by Chinese President Xi Jinping, the Belt and Road Initiative (BRI) has invested hundreds of billions of dollars in the development of bridges, ports, motorways, power plants, and telecoms projects throughout Asia, Latin America, Africa, and portions of Europe.
The Belt and Road Initiative (BRI), hailed by Xi as a “project of the century,” has evolved as a prominent emblem of China’s ascent as a global power. However, it has been met with increasing skepticism, particularly in Western capitals where governments are suspicious of Beijing’s global ambitions.
The vast project has been dogged by criticism. Beijing has been accused of saddling developing countries with crippling debt. At the same time, its enormous projects have frequently been met with complaints – and even demonstrations – over environmental consequences, labor breaches, and corruption scandals.
After a decade, Xi’s global construction frenzy has reached a fork in the road. As the world’s second-largest economy declines, Chinese investment in BRI projects has slowed.
Meanwhile, the US has suggested its investment program to increase global infrastructure development, seeing the BRI as a weapon for Beijing to extend its worldwide influence at the price of American strength.
As leaders and delegations from around the world gathered in Beijing, security was intensified, with road closures and a substantial police presence.
Here’s the lowdown on Xi’s trademark foreign policy agenda.
What has it accomplished?
The BRI initially envisioned as an overland “belt” and a marine “road” connecting China with Europe and Africa, has sponsored infrastructure and energy projects throughout the developing globe.
Chinese construction businesses have built roadways from Papua New Guinea to Kenya, ports from Sri Lanka to West Africa, and electricity and telecoms infrastructure from Latin America to Southeast Asia, with funding from China’s development banks and state-run commercial lenders.
According to Beijing, over 150 countries have signed cooperation agreements under the aegis of the BRI, with commitments for over 3,000 projects and “up to one trillion dollars of investment mobilized.”
However, tracking BRI finance is notoriously tricky because Beijing does not openly publish this data, and a wide range of financial firms play roles.
According to a study conducted by Boston University’s Global Development Policy Centre, China’s two largest development banks provided at least $331 billion to developing-country government borrowers between 2013 and 2021.
According to AidData, a research lab at William & Mary in the United States, China spent more than twice as much financing overseas development projects per year in the first five years of the initiative as any other major country, including the United States.
Officials in China have praised the program for “transcending the old mindset of geopolitical games” and “creating a new paradigm of international cooperation.”
What are the risks and disadvantages?
While the BRI has offered critical assistance to underdeveloped countries, opponents argue its initiatives have come at a cost, drawing comparisons to America’s Marshall Plan to rebuild Europe after World War II.
Some have been accused of low environmental and labor norms, while others have frequently been hampered by financing shortages or political opposition.
According to the Global Development Policy Centre, Chinese-built fossil-fuel power plants emit approximately 245 million tonnes of CO2 annually. Chinese development finance projects pose significantly more significant risks to biodiversity and Indigenous lands than World Bank-financed projects.
The primary source of concern, however, is risky lending, with critics accusing China of saddling low- and middle-income countries with too high levels.
What happens next?
The BRI was initially presented as a strategy to channel China’s excess capacity overseas and establish new markets for Chinese exports.
However, as China’s economy weakens, the ambitious program appears to be losing pace — a decline that began before the Covid outbreak.
According to Global Development Policy Centre data, overseas financing from China’s two development banks to government borrowers fell significantly from $87 billion in 2016 to $3.7 billion in 2021, excluding funds from other lenders such as commercial banks or other entities.