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  • Abhinav Seetharaman

China’s Belt Road Initiative: Problems and Prospects

In 2013, Chinese President Xi Jinping famously announced China’s development strategy for the Belt and Road Initiative (BRI) during official visits to Indonesia and Kazakhstan. One of the most ambitious infrastructure projects in world history, the BRI has been China’s masterplan to enhance regional connectivity between itself and the rest of the world, as well as globalize its investment. Since its inception, China has pumped hundreds of billions of dollars into ports, railways, and energy projects, both inside and outside its borders.


On the domestic front, China has constructed over 35,000 kilometers of high-speed rail tracks since the 2008 global financial crisis, 68,000 kilometers of express ways since 2010, a 55-kilometer long sea bridge connecting the mainland city of Zhuhai with Hong Kong and Macau, and the world’s largest hydroelectric dam (in Hubei province) since 2012. Several Chinese cities have seen exponential growth over the last decade, with the construction of numerous skyscrapers and widespread encouragement of technological innovation transforming urbanization.

Internationally, China has long envisioned the BRI to be paramount to growing its economic influence. This is especially evident vis-à-vis its vision of a China-centered Maritime Silk Road, a project that includes an expansion of the country’s maritime capabilities. Over the last ten years, the world’s second-largest economy has acquired various ports in strategic locations around the world, including Hambantota in Sri Lanka, Piraeus in Greece, Doraleh in Djibouti, and Gwadar in Pakistan. The country’s uncanny ability to “talk less, and build fast and cheap” has proven attractive to developing economies, many of which have bought into said model and contracted Chinese construction firms to carry out a number of megaprojects.


However, many of China’s BRI visions currently seem far from reality, as evidenced by on-ground situations in Pakistan, Sri Lanka, Malaysia, and Kenya. For example, Gwadar’s International Airport, slated to become the largest airport in Pakistan, was scheduled to be completed three years ago with Beijing pledging to fully fund the project. Today, it remains unconstructed, continually plagued by delays and routine billion-dollar bailouts that Pakistan has received from the International Monetary Fund (IMF). The China-backed East Coast Rail Link in Malaysia, a 640-kilometer-long megaproject, was temporarily suspended in 2018 due to exorbitant costs and unfair terms cited by Malaysia. In East Africa last year, a Kenyan court halted construction of the country’s first — and Chinese-funded — coal-fired power station strictly on environmental grounds. And back in December, Sri Lanka’s newly elected government expressed its strong desire to reclaim the Hambantota port from China after pressure from locals that the port deal symbolized subordination to Beijing.

Other tales of friction and disruption abound across Southeast Asia. Construction work on the China-Laos railway project has adversely affected several local Laotian waterways, with residents citing higher levels of water pollution caused by repeated tunnel boring. The real possibility of unsustainable debts looms largely over smaller and less affluent countries, threatening to constrict their future economic mobility even after the completion of infrastructure projects.


Such challenges bring up a question that long seemed improbable: is China scaling back its global ambitions? There is no question that the BRI has recently run into a series of problems with poor standards and unprofitability, which nations have grown increasingly wary of. Some have even started to question China’s true intentions behind the BRI, arguing that its primary objective is not to improve international connectivity but rather to mostly increase Beijing’s political and strategic influence. And as countries voice their concerns over the debt-trap diplomacy strategy that China has so masterfully utilized, it seems quite probable that many of these projects will be called into question more frequently.


In spite of the aforementioned issues, China’s hopes of realizing its BRI goals will likely be shaped most by the ongoing COVID-19 pandemic. The coronavirus has crippled the global economy (of which China controls 15 percent), adversely impacting manufacturing, supply chains, and movements of people and goods. And as its ripple effects continue to echo worldwide, China finds itself at a crossroads, having to sustain its supposed containment of the virus while balancing challenges to its liquidity and kickstarting its economy. Decisions made by the Chinese government now will undoubtedly change the pace and scope of the BRI in the short and long-run, and inevitable shifts in manufacturing and supply chain activity will determine how much digital emphasis will be placed on BRI activity.


Ultimately, China’s biggest constraint may very well be it is own economy. Economic growth has slowed to the lowest rate in nearly three decades, inflation has been on an uptick, and the effects of the ongoing trade war with the United States are slowly starting to be felt. All of the above factors could potentially result in a more cautious Chinese approach to investment going forward.

As impressive as the efforts to overhaul its domestic infrastructure have been, China’s power-driven international aspirations rest heavily on the BRI’s success. As such, any setbacks that the BRI experiences will continue to have adverse impacts on the country’s economy. How it will navigate past these roadblocks remains to be seen, but one thing is clear: the next decade will be integral for China and promises to continually test its resolve.

(Abhinav Seetharaman is the current Princeton-in-Asia Fellow at the Milken Institute in Singapore. He is a graduate of Columbia University, from where he obtained his bachelor’s and master’s degrees).

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