The Belt and Road Initiative
Launched in 2013 by President Xi Jinping, the Belt and Road Initiative is China’s ambitious project to close the gap in Asia’s US$900 Billion infrastructure financing deficit. With US$4 Trillion having already been spent and an estimated cost of US$8 Trillion, the Belt and Road Initiative is by far one of the most ambitious infrastructure projects in the world. It initially aimed to facilitate trade between Asia and Europe via physical infrastructure, yet the project has quickly expanded to encompass 147 countries and about 40% of the world's GDP, ranging from Oceania to South America. However, as Chinese tensions with America and India reach an all time high, allegations of the BRI being nothing but a means for China to expand its economic, political, and military prowess have ensued. Many experts are claiming that China is creating debt traps to further consolidate their foothold in the international community, both economically and politically. In the midst of the initiative, 22 countries are already in debt to China, including Argentina (US$111.8 billion), Pakistan (US$48.5 Billion) and Egypt (US$15.6 Billion). With no alternative options offered by global powers, most countries seeking to establish prominence in international trade have no choice but the BRI, aptly named the “modern day Silk Road”.
To fully understand the framework of the initiative, it is important to learn about the meaning of the Silk Road in a historical context. Spanning well over 6,400km, the Silk Road was a project conceived by the Chinese Han Dynasty (206 BCE – 220 CE) that connected Eurasia to Africa through extensive land and sea routes. However, with this knowledge, we must question the need for this incredibly vast infrastructure.
The expansion of imperial power was significant in the development of the Silk Road. Toward the end of the 2nd century, to protect the outlying Chinese villages from raiders, Emperor Wu of Han sent a man to find new horses for his cavalry. Soon he returned, telling tales of incredible horses that were termed “heavenly horses”. These horses became a desired commodity that were traded throughout the region. In fact, the Chinese bought so many of these horses that the people who controlled the Ferghana valley (the native region for these animals) refused to trade anymore. Due to this, the emperor made the decision to conquer the valley, opening a route to the west and leading to the formation of the Silk Road.
The Silk Road was an innovative system of trade at the time, lasting for well over 2000 years. Its role in society was a remarkable feat, with merchants and traders lining and commuting along the road even in challenging terrain and harsh weather conditions. Eventually, around 1453 CE, the Ottoman Empire restricted trade with the west and, by extension, the Silk Road disappeared. Now, the BRI is a reinvention of the long-abolished silk road. Through vast expanses of physical infrastructure, China wants to facilitate trade with the west just as it had nearly 1500 years ago.
Its presence is becoming known in all corners of the globe, and the BRI has many, significant geopolitical implications which have, and will continue to, affect the future as we know it. Often compared to the US’ Marshall Plan during the Cold War, many believe that the initiative might be all but a means for China to consolidate their foothold in the international community by arm twisting and exorbitant spending. However, the Chinese Ministry of Foreign Affairs later announced that the initiative does not have any geopolitically backed aims.
Whilst this may be true, most powers do recognise that there will, wanted or not, inevitably be geopolitical implications that place a significant amount of economic and political power in the hands of the Chinese government, an outcome that is inherently threatening to both pre-existing powers such as the US and other emerging powers such as India.
The impacts of the initiative are numerous for all countries involved, and even those that are not. The BRI is primarily sold as an economic endeavour, and is predicted to boost trade throughout the region by significant amounts, including by closing trade gaps that already exist. It would also support struggling nations, some of which are operating at 30% below their economic potential and 70% below their FDI potential - the BRI would support these nations in developing their infrastructure. Through such advanced infrastructure that can increase trade by 6.2%, the BRI will also increase foreign investment. MNC’s will become more likely to invest in the beneficiary countries, propelling their economies.
We ought to note, however, that infrastructure and investment comes at a cost; public debt is at an all time high, so you must ask if it is worth it for all these nations? And, as with any large infrastructure project, the BRI does have its own, inherent set of problems. First and foremost, one needs to acknowledge the potential climate risks associated with the BRI - it is estimated to increase emissions by as much as 7% in certain areas, and 0.3% globally. Furthermore, more than 22 of the countries involved in the initiative are drowning in debt, so - in the long term - the BRI leaves much to be desired regarding debt sustainability.
Moving onto its strategic implications, the BRI gives China a global foothold. China is using debt traps and strong-arming smaller, lower-income countries, meaning the initiative could have many political and security ramifications. This could all disrupt the status quo, which should concern current powers.
In conclusion, the initiative promises to be an avenue for growth and development for struggling low-income nations. However, given the current economic situation, it could do more harm than good for a handful of these states. Furthermore, this initiative threatens to disrupt the current status quo, giving China significant power in the global economy and international politics, worrying current superpowers. All in all, whilst ambitious and potentially a keystone in the global economy of the future, I feel like any country having this much power cannot end well.