10 Years of China’s Belt and Road Initiative (BRI)

Why in news?

The year 2023 marks a decade since China’s ambitious infrastructure funding project, the BRI, was first outlined by President Xi Jinping.

What is BRI?

• ‘Belt’ Plan- President Xi Jinping announced the Silk Road Economic ‘Belt’ during his visits to Kazakhstan in 2013.
• It was to revitalise a series of trading and infrastructure routes between Asia and Europe.
• Connectivity through Central Asia was a key element of the initiative.
• ‘Road’ Plan – A sea trade infrastructure called ‘Road’ was announced to connect China with Southeast Asia, Europe and Africa.
• The major focus has been to build ports, bridges, industry corridors, etc. throughout South East Asia and Indian Ocean.
• Together, these initiatives were referred to as the One Belt One Road Initiative (OBOR).
• Aim of BRI - China wanted to
  • Resolve capital surplus and industrial overcapacity
  • Increase its political influence in broader regions
• Corridors - The initiative includes 6 international corridors.

• Principles of BRI
  • Policy coordination
  • Infrastructure connectivity
  • Trade
  • Financial integration
  • People-to-people connections
  • Industrial cooperation
• Main channels for BRI financing - China-headquartered Asian Infrastructure Investment Bank (AIIB) and Silk Road Fund (SRF)
• BRI Forums - China has hosted 3 BRI Forums in 2017, 2019, and 2023.

What is the China’s view on BRI?

• Project of the century - In 2017, Xi dubbed BRI as the “project of the century” and it is a part of his long-term dream of a China-dominated world.
• It was reported that 3,000 BRI projects valued at $1 trillion, are currently underway across the globe.
• Economic development - According to a report by the World Bank, the BRI increased the trade of participating parties by 4.1%, attract 5% more foreign investment, and levelled up the GDP of low-income countries by 3.4%.
• Employment - By 2022, Chinese enterprises’ investment in the cooperating countries has created 421,000 local jobs, with more than 3,000 projects being implemented.
• Connectivity - It facilitated connectivity between China and countries in 5 priority dimensions of policy, infrastructure, trade, finance and people-to-people ties.
• Geopolitical leverage - The BRI has already cultivated substantial diplomatic and geopolitical leverage for China within the Global South.
• Others -The communication and cooperation in education, culture and tourism are enhanced, people-to-people exchanges and mutual learning among civilizations along the route also flourished.

Apart from the BRI, Chinese President also proposed 3 other Initiatives over the years - Global Development Initiative, Global Security Initiative and Global Civilization Initiative.

What are the criticisms against BRI?

• Funding - With China's slowing economic growth, the volume of projects and the amount of money going into the BRI have stagnated.
• Italy’s case - Italy’s possible departure from the BRI will be a symbolic setback as it was the only G7 country which had formally joined the initiative.
• Debt crisis - The economic non-viability of many projects is questioned as it had led to “debt trap” situations in countries like Sri Lanka.
  • Malaysia cancelled $22 billion worth of BRI projects, citing inflated prices.
• Nature of contracts- The inflexible nature of BRI contracts, where credit is extended at close to market rates, and debt cancellation or restructuring rarely included, has been a major impediment.
• Transparency - The lack of transparency regarding the financing raises questions about the long-term implications of BRI.
• India’s view- India opposes this project as China Pakistan Economic Corridor (CPEC) passes through Pakistan occupied Kashmir, infringing on India’s sovereignty and territorial integrity.
• De-risking - European nations are trying to reduce their dependence on China amid a Western push to de-risk supply chains, alongside growing geopolitical tensions with Beijing.

What lies ahead?

• Faced with a challenging geopolitical and economic landscape, China is now adjusting its ambitions, aiming to pivot towards green and smaller-scale development projects.
• Other potent alternatives for BRI are as follows.
  • In 2021, the G7 launched the Build Back Better World Initiative (B3W) which was later renamed as Partnership for Global Infrastructure and Investment (PGII)
  • In 2023, the EU announced the Global Gateway Programme (GGP)
  • India announced the India-Middle East-Europe (IMEC) corridor at the New Delhi G20 summit

References

1. Indian Express | 10 years of China’s Belt and Road Initiative
2. Business Standard | BRI: Ten years after