BRI 2.0: Reflecting on the past, charting the future
BRI 2.0: Reflecting on the past, charting the future
WRITTEN BY KELLY ANTOINETTE KHYRIEM
8 March 2024
In 2013, President Xi Jinping’s unveiling of the Belt and Road Initiative (BRI) marked a paradigm shift, aiming to redefine global trade and position China as a world leader. The BRI, which includes the land-based Silk Road Economic Belt and the sea-based 21st Century Maritime Silk Road, extends beyond traditional infrastructure projects. The holistic vision encompasses hard, soft, and digital infrastructure, trade policy coordination, financial cooperation, and the establishment of multilateral institutions. The scale of the initiative is remarkable, with 155 countries joining the BRI by signing Memoranda of Understanding (MoU) with China (as of August 2023).
It is imperative to cast a retrospective gaze on the transformative journey of the BRI over the past decade, as the ambitious venture has no doubt left an indelible mark on today’s global landscape. Therefore, exploring its impact on recipient countries, the intricate interplay between domestic benefits and geopolitical strategy becomes crucial for a nuanced understanding. From its role in China’s domestic development to shaping the geopolitical chessboard, the BRI has been both celebrated and criticised.
Belt, road, and bumps
The success and adaptive capabilities of China’s BRI over the past decade are inherently tied to the challenges it presents to the US-led international order. One prominent issue revolves around geopolitical perceptions, with critics labelling the BRI as neo-imperial and hegemonic. China’s willingness to lend to financially unstable states raises repayment risks amid corruption and conflict.
A recent Center for Global Development report identifies eight countries heavily indebted to China at high risk of default. Yet Beijing keeps lending because there is more to the BRI than just economics. Critics argue that China’s lending strategy aligns with its broader ambitions — notably seen in the ‘string of pearls’ theory. This strategic approach involves establishing naval bases along the Indian Ocean to secure crucial shipping routes, illustrated in Chinese investments in ports such as Colombo, Sri Lanka, and Gwadar, Pakistan.
Accusations of debt-trap diplomacy have surfaced, particularly regarding countries struggling with BRI-related loans — exemplified by the Maldives owing a substantial sum to China. Critics argue that China strategically lends to nations with unstable regimes or ineffective fiscal reforms. For instance, Sri Lanka’s Hambantota Port project has raised concerns about economic sovereignty due to China’s financing. However, some dispute the debt-trap narrative, attributing countries’ debt woes to factors like corruption and governance deficiencies. Also, China’s willingness to negotiate debt terms, seen in cases like Kenya and Zambia, challenges this narrative.
As criticisms propel the initiative towards a BRI 2.0, if China actively addresses and mitigates risks associated with its projects by enhancing transparency and accountability frameworks, it has the potential to outpace the emerging alternatives that are challenging the BRI.
Corruption allegations have also marred certain BRI projects. The former Malaysian Prime Minister, Najib Razak, finds himself in the middle of a major corruption scandal associated with the 1Malaysia Development Berhad (1MDB) — a fund linked to several BRI projects in Malaysia. He faces accusations of syphoning off millions from the fund for personal gain.
Furthermore, India’s concerns regarding the flagship China-Pakistan Economic Corridor (CPEC) project passing through Jammu and Kashmir reveal the geopolitical complexities associated with BRI projects. Reports concerning human rights abuses at Gwadar Port have emerged, highlighting the exploitation and poor working conditions of labourers employed in the construction of this key BRI infrastructure. Allegations include insufficient safety measures, long working hours, and inadequate compensation. These deficiencies prompted Myanmar, Malaysia, Bangladesh, and Sierra Leone to cancel or downsize their BRI commitments.
Environmental consequences, such as ecological damage caused by large-scale infrastructure projects, have fuelled concerns about sustainability and prompted calls for responsible development practices. Large transportation endeavours along BRI routes, spanning across Cambodia, Kyrgyzstan, and Laos, have contributed to a notable seven per cent increase in total carbon dioxide emissions. As the BRI continues to expand, researchers, as well as governmental and non-governmental organisations, express apprehension regarding its environmental implications.
In response to the concerns associated with certain BRI projects, the European Union (EU), the United States, and India have emerged with alternative positions and strategies, aimed at addressing or mitigating the impact of the BRI and countering China’s geopolitical influence. The EU has voiced concerns regarding BRI projects in terms of transparency, labour rights, and environmental standards. The EU advocates for its own alternative initiatives like the EU-Asia Connectivity Strategy and the Global Gateway Initiative, prioritising high-quality standards and collaboration.
The US, on the other hand, raises concerns about the BRI’s geopolitical implications and potential debt dependencies, countering it with the Blue Dot Network and G20-led Partnership for Global Infrastructure and Investment (PGII). The development and promotion of the Middle-East Europe Economic Corridor (IMEC) on the sidelines of the G20 Leaders' Summit 2023, by various stakeholders including Western nations, India, the UAE, and Saudi Arabia, could provide a potential alternative, fostering opportunities for alignment and mutual benefits.
Charting a ‘small is beautiful’ course
The BRI has experienced setbacks amid the COVID-19 pandemic and the Russia-Ukraine war. The pandemic, coupled with China's then global isolation and deteriorating image, impacted the funds allocated to BRI projects. However, these challenges did not signal the demise of the BRI. Rather, they prompted a significant transformation in its nature. Amid stalling projects and substantial loan souring, Chinese officials assessed the extensive BRI programme, to determine the future of the initiative and identify areas for improvement.
Reports indicate that Chinese banks have significantly scaled back lending in low-income countries and temporarily halted investments in certain states. Additionally, there is a shift towards favouring smaller, more agile projects like hydropower plants and solar farms over large-scale infrastructure endeavours. This redirection aligns with the increasing emphasis on digital infrastructure, such as 5G networks, reflecting a 300 per cent surge in Belt and Road engagement in the tech sector compared to the previous years. Furthermore, changes in financing practices are anticipated, with a potential shift towards public-private partnerships and loan syndication to mitigate risks and combat corruption.
Against this backdrop, the Third Belt and Road Forum for International Cooperation in October 2023 (which celebrated a decade since the inception of the BRI), reflected China's commitment to rebooting the BRI. The evolution from ‘project of the century’ to ‘small is beautiful’ is driven by the realisation that much of the planned infrastructure is already in place and there is a need to adapt to China’s evolving technological landscape amid increasing Western scrutiny. Despite economic headwinds, Xi Jinping's vision for the BRI appears to remain resilient.
The recent forum outlined eight guiding principles for a refined and "high-quality" BRI, emphasising integrity, environmental sustainability, deepening people-to-people cooperation, and debt management over the next decade. The recalibration also embraced a focus on digital connectivity, encapsulated in the concept of a ‘Digital Silk Road’. As a result, investments in 5G technology, digital infrastructure, and e-commerce initiatives may play a pivotal role in shaping the next phase of the BRI. Despite facing competition from other international economic strategies, the BRI's role in global infrastructure development persists.
In charting the course for the future, China recognises the imperative to rectify past flaws. Rather than relying on coercive tactics, China should focus on enhancing the supervision and design of BRI projects. As criticisms propel the initiative towards a BRI 2.0, if China actively addresses and mitigates risks associated with its projects by enhancing transparency and accountability frameworks, it has the potential to outpace the emerging alternatives that are challenging the BRI.
The challenge for BRI partner countries then lies in balancing economic development with environmental protection. To address this, China’s endorsed policies like the Green Belt and Road are crucial. Ensuring an economy-ecology balance is a fundamental necessity for the long-term success and credibility of the BRI.
China’s commitment to sustainability is evident in plans to launch environmentally friendly infrastructure projects, invest in green initiatives, and offer green financing. The Third Belt and Road Forum underscored China’s dedication to revitalising the BRI. The rejuvenation is framed by a shift towards "smaller" and "greener" projects, responding to criticism about debt burdens and environmental concerns. This trajectory could align the BRI with global efforts to address climate change and promote responsible government.
Despite criticism, Beijing has shown signs of adopting more sustainable practices beyond the BRI. For instance, it has undertaken significant environmental conservation efforts, particularly in the mountains of Central Asia. In the Tianshan Mountains, China has initiated the Tianshan Wilderness Project, aimed at preserving biodiversity and ecosystems. Furthermore, China has become a global leader in renewable energy investment and deployment, particularly in solar and wind power. By investing in clean energy infrastructure and phasing out coal-fired power plants, Beijing is transitioning towards a more sustainable energy future, regardless of BRI involvement.
On the socio-economic front, the Third Belt and Road Forum endorsed the Beijing Initiative for the Clean Silk Road, emphasising collective efforts among BRI countries to combat corruption. Furthermore, China is on the right trajectory in terms of collaborating with multilateral institutions and drawing inspiration from the Asian Infrastructure Investment Bank (AIIB), where diverse stakeholders contribute to decision-making processes. As the initiative evolves, a noticeable trend toward smaller projects emerges — echoing the mantra ‘small is beautiful’. We can anticipate a future where the Belt and Road Initiative transforms into a more sustainable and transparent global endeavour.
Balancing ambitions and sustainability
In the decade since its inception, the BRI has etched a profound mark on the global landscape. From ambitious infrastructure projects to digital connectivity, it has redefined geo-economic strategies, yet it grapples with an array of challenges and controversies. The accusations of debt-trap diplomacy, intertwined with economic vulnerabilities in the partner countries, cast shadows on the BRI’s objectives. Beyond economic intricacies, the BRI faces ethical quandaries, highlighted by corruption scandals and environmental repercussions, which not only impact global perceptions but also the long-term sustainability of the BRI.
The EU, US, and India’s alternative strategies underscore the need for a diversified approach, emphasising transparency, ethical considerations, and adherence to international standards. The BRI’s shift towards smaller and greener projects is commendable, however, the challenge lies in preserving the initiative’s impact and safeguarding its overarching objective of economic modernisation and development from dilution or compromise.
The transition brings to the forefront a pivotal question: can China maintain the BRI’s resolute ambitions amid this transformative shift? The journey towards smaller' and greener projects presents a myriad of challenges. Ensuring economic viability becomes crucial, particularly as the appeal of larger infrastructure endeavours diminishes in favour of sustainable alternatives. In essence, the BRI faces not just an evolution in projects but a fundamental transformation in its guiding principles.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Kelly Antoinette Khyriem is a PhD candidate at the Centre for Russian and Central Asian Studies (CRCAS) at Jawaharlal Nehru University, New Delhi. She also holds a master’s degree in Politics with a specialisation in International Studies from the School of International Studies, Jawaharlal Nehru University. Image credit: Unsplash/Ricardo Gomez Angel.