China’s Belt and Road Initiative turns 10
A man walks past a symbol of the Belt & Road Initiative.
Xi and Chinese Foreign Minister Wang Yi claimed that the third meeting for the BRI Forum was a huge success, and that it has bolstered the BRI. But critics and observers from the West say that this is not an accurate description because the Chinese economy is still struggling to recover from the impact of the pandemic interruption of 2020 and 2021, and that the BRI has suffered because of this.
The calculation is that before the pandemic set in, China had invested around $124 billion in Africa alone, and that it has now declined to around $67 billion, which is nearly half of what it was before. It is also being pointed out that China’s BRI initiative has pushed countries like Pakistan, Sri Lanka into a debt trap, something that the Chinese officials vehemently deny.
The West, especially the United States, looks at Xi’s BRI as an attempt to establish Chinese footprint and hegemony in large parts of the world, especially the Global South. There was a time when even European countries were drawn to BRI as a commercial proposition, and some of the former East European countries like Hungary still seem to believe in it. But advanced European economies like Italy are not sure. Italy which had signed up for BRI now wants to pull out of it because a right-wing coalition government has come into power in Rome. Meanwhile, the US is strenuously trying to build a counter to the BRI through the recent announcement of the Indian-Middle East-Europe-Corridor (IMEEC) of a network of roads and ports to connect India and Asia with Europe. But with the eruption of the war in Gaza, the plan is likely to be put on the back-burner. The US however denies that the IMEEC is a counter to the BRI.
China is indeed looking out because it is now the second biggest economy in the world after the United States. It needs markets as well as raw materials even as the United States and Europe want to choke China by denying technology, especially in the field of Artificial Intelligence (AI) and semi-conductor manufacturing. The United States projects the undeclared trade and technological war with China as one between democracy and autocracy. Though the West, especially Europe, was doing business with Russia until the outbreak of war in Ukraine in February, 2022, the economic sanctions against Russia are now being interpreted as a fight between democracy and autocracy.
China is facing economic headwinds, and the comfort zone it was in before the pandemic is not there anymore. But China would want to continue with its global economic agenda through BRI because of its domestic compulsion. China has to spread its wings in order to sustain is domestic growth. The US and European countries are not able to maintain their global aid and investment programmes because of the slowing down of their domestic economies. They are not in an expanding mode. China on the other hand is in an expansionary mode.
It is possible that the BRI would not be grandiose new global economic architecture that Xi wants it to be, but it will continue to play a strategic role in helping the poor economies in coping with their internal economic crises, and the international aid they badly need. China is now one of the biggest aid donors in the world, and it is leveraging the BRI to channel aid and financial assistance.
