China’s President Xi Jinping had declared the Silk Road and Belt Initiative later known as Belt and Road Initiative (BRI) in his two speeches delivered in Kazakhstan and Indonesia in September and October 2013. The Chinese government is celebrating the 10th anniversary of the declaration this year. There are three important developments in recent past with regard to the BRI. First, the Chinese government issued a White Paper on BRI on October 11, 2023. Second, it organised the Third Belt and Road Forum in Beijing on 18 October 2023. Third, China published a document on BRI cooperation in the next decade on 24 November 2023. The paper aims to analyse the three developments as they primarily represent the past, present and the future of China’s BRI.
White Paper on BRI: The Past 10 years
China's State Council Information Office released a White Paper titled “The Belt and Road Initiative: A Key Pillar of the Global Community of Shared Future” (can be interpreted as Community of Common Destiny) in October 2023.[i] The title of the White Paper itself suggests that BRI is fundamentally a strategic and not merely an economic initiative. Over the years the scope of BRI has widened from economic and energy to include political, strategic, socio-cultural, digital, space, health, education and security dimensions. According to the White Paper, “the ultimate goal of the BRI is to help build a global community with a shared future.”[ii] China’s vision of a “global community” and “shared future” is problematic because it assumes that all countries want what China wants. China’s view of Asia and the world has been hierarchical and aimed at creating a Sino-centric order.
The White Paper presents BRI’s achievements over the last 10 years from a Chinese perspective. It informs that “China has signed more than 200 BRI cooperation agreements with more than 150 countries and 30 international organizations across five continents”, yielding a number of big and small-scale projects. [iii] It gives details of cooperation in the field of infrastructure connectivity, maritime connectivity, air connectivity, investment, and collaboration in industrial, financial, cultural and tourism, green development, scientific and technological, innovation and digital areas.
The White Paper notes that from 2013 to 2022, “the cumulative two-way investment between China and partner countries reached US$380 billion, including US$240 billion from China”. In other words, China invested US$ 240 billion in BRI recipient countries in the last 10 years and BRI participating countries have also made investment of US$ 140 billion in China. These figures suggest that the achievements of BRI are not something extraordinary as far as China’s direct investments in participating countries are concerned. The White Paper notes that “the value of newly signed construction contracts with partner countries reached US$2 trillion, and the actual turnover of Chinese contractors reached US$1.3 trillion”. Construction contracts usually involve Chinese companies that develop a specific project. The project can be financed with Chinese loans, but the ultimate ownership of the project usually lies with a different company or local government. [iv]
The White Paper emphasised that the cooperation with BRI participating countries is a declared agenda. However, it does not make reference to various challenges faced by participating countries including: high cost of the projects; concerns about debt sustainability; issues related to transparency and Chinese model of investment; and adverse environmental and social impacts of some BRI projects in participating countries.
Corruption has plagued many Chinese projects in BRI participating countries. A study by AidData (2021) found that 35 per cent of BRI projects have been challenged by corruption, excessive debt or labour exploitation. [v] Due to these reasons, the current phase of BRI is characterised by rethinking, renegotiation, downsizing and even cancellation of the project by some recipient counties. Most recently, Philippines announced the termination of major infrastructure projects under China’s BRI worth US$ 4.9 billion in November 2023.[vi] The fact remains that in case of debt issues, China does not proactively engage with host countries on debt treatment or debt restructuring or take steps to ameliorate the situation.
Third Belt and Road Forum
China organised the Third Belt and Road Forum in Beijing on 17-18 October 2023. The Government announced that the Third Belt and Road Forum was attended by over 10,000 registered representatives from 151 countries and 41 international organizations.[vii] However, the lack of high-level participation in this BRI Forum compared to previous Forums (summits) suggest the declining influence of China’s high profile initiative. While China is commemorating 10th anniversary of BRI, 22 Presidents/Prime Ministers of different countries participated in the Forum.[1] It may be noted that 37 President/Prime Ministers had participated in the Second Belt and Road Forum held in 2019 and 30 in the First Forum held in 2017. [viii] Further, Italy has formally notified China of its withdrawal from the BRI. It was the only G7 nation to join the initiative in 2019. This could be seen as a major setback to BRI’s credit and its global image.
Main highlights of the Forum
President Xi’s keynote speech can be considered as the main highlight of the Third Belt and Road Forum. He announced a number of steps to support the BRI. [ix] It includes:
(i) Building a multidimensional Belt and Road connectivity network: China aims to integrate ports, shipping and trading services under the “Silk Road Maritime”.
(ii) China will support an open world economy.
(iii) China will advance scientific and technological innovation. It launched the “Global AI Governance Initiative”.
(iv) Green Development: China will continue to deepen cooperation in areas such as green infrastructure, green energy and green transportation, and step up support for the BRI International Green Development Coalition.
(v) China will promote both signature (Big) projects and “small yet smart” livelihood programs.
(vi) China will support people-to-people exchanges.
(vii) Integrity-based Belt and Road cooperation: China will establish the Integrity and Compliance Evaluation System for Companies involved in Belt and Road cooperation together with its partner countries.
(viii) Strengthen institution building: China will strengthen building of multilateral cooperation platforms covering energy, taxation, finance, green development, disaster reduction, anti-corruption, think tank, media, culture and other fields along with partner countries.
(ix) Finances: The China Development Bank and the Export-Import Bank of China will each set up a RMB 350 billion financing window. An additional RMB 80 billion (US$ 11 billion) will be injected into the Silk Road Fund. The Silk Road Fund is a China Government Guidance Fund to foster increased investment in countries along the BRI. It began in 2014 with an initial capital base of US$ 40 billion.[x] Cooperation agreements worth US$ 97.2 billion were concluded at the CEO Conference held during the Third Belt and Road Forum.
Luban Workshops
President Xi announced that China will carry out 1,000 small-scale livelihood assistance projects, and enhance vocational education cooperation through Luban Workshops and other initiatives. Luban Workshop is a Chinese-funded vocational training program. There are more than 30 Luban Workshops in 25 countries which are underway around the world, largely in Asia and Africa, offering a host of skills training programs.[xi] The attempt is to counter criticism that large infrastructure projects with Chinese loans and Chinese labour are doing little for the population of participating countries. This could be seen as a new beginning for China, which focussed primarily on infrastructure projects.
It may be noted that India has been at the forefront to provide capacity building and training to a large number of developing counties through various programmes, especially under the Indian Technical and Economic Cooperation programme since 1964. India’s demand-driven approach has empowered people and developed human capital and institutions in many countries of the Global South. India’s successful example has been an issue of research for many countries across the globe.
Fading Consensus, Facing Challenges
The fact remains that China was not able to issue a Leaders’ Roundtable and Joint Communiqué after the Third Belt and Road Forum (2023), unlike the previous Forums. It issued a Chair’s Statement on the Forum. In other words, China was not able to build consensus with BRI participating countries. This is largely because the concerns related to China’s BRI are much evident in recent times. The initial enthusiasm about BRI in many countries seems to dissipating now.
A recent publication from the Chinese Academy of Social Sciences, Beijing, has acknowledged challenges facing BRI “in terms of industrial cooperation, economic and trade contact, regional development, legal norms, international relations, and other aspect.”[xii]
It is now well known that China’s BRI projects have received backlash in some countries/ regions of the world.[xiii] President Xi announced to “step up joint efforts to ensure the safety of BRI projects and personnel”. Meanwhile recent reports claim that Pakistani Taliban has threatened to initiate attacks on Chinese Belt and Road projects, unless they receive 5 percent tax on the projects from the Pakistan government. [xiv] This explains complexity of initiating BRI projects in conflict and corrupt environment.
The Future of BRI
China published a document titled “Vision and Actions for High-Quality Belt and Road Cooperation: Brighter Prospects for the Next Decade” on 24 November 2023.[xv] The document was prepared by the Office of the Leading Group for Promoting the BRI.
From the beginning BRI focused cooperation in five fields: (a) policy coordination, (b) infrastructure connectivity, (c) unimpeded trade, (d) financial integration, and (e) people-to-people ties.
The new document added sixth field as “cooperation in new fields” which includes green development, new forms and models of digital cooperation, technology innovation, and international cooperation in health. Further, China aims to build leading brands and a multidimensional connectivity network, strengthen risk control and security system, and improve cooperation mechanisms. It also aspires to work with all parties to support multilateralism and free trade, and advance the alignment of rules and standards, strengthen international exchanges and cooperation in e-commerce, enhance bilateral investment cooperation and explore new investment and financing channels.[xvi]
In sum, the Vision Document (Nov 2023) aspires to make improvements at many fronts with regard to operation of BRI projects. Only time will tell whether the current trend of declining influence of BRI is reversed. The reality is that China is not able to find a solution that is acceptable to all countries involved in BRI regarding debt sustainability issues. The world has witnessed an emerging consensus against non-transparency and policies which promote unsustainable loan or the ‘debt trap’ for participating countries.
Conclusion
China’s BRI has completed a decade. Initially, there was a lot of enthusiasm in many countries about investment from China. However, the journey of the initiative has not been smooth and it has invited various controversies and faced backlash and protests in some countries/region across the world. The publication of the White Paper (October 2023) highlights BRI’s achievements in many fields for participating countries but it also makes the strategic ambition of China much evident.
The Third Belt and Road Forum was organised in Beijing after a gap of four years when China is celebrating 10th anniversary of the BRI initiative in 2023. But the less number of top level participation (compared to previous Forums) and inability to forge consensus with participating countries has given mixed signals to the world. President Xi announced a number of measures to support the Initiative. However, by promoting China-led concepts, it results in reaction from countries of Asia who challenge a Sino-centric order.
The most recent document on BRI has been released in late November 2023, after the third Belt and Road Forum was held. The document presented its vision about the future of BRI especially in the next 10 years. China may opt for “smaller” BRI projects. This makes sense as China is currently experiencing economic slowdown. The focus of the future cooperation may include green development, new forms and models of digital cooperation as well as capacity building in participating countries. China has also projected its support to multilateralism. China needs to adhere to universally recognised norms and principles of multilateralism and respect sovereignty and territorial integrity of other countries while initiating any BRI project.
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*Dr. Sanjeev Kumar, Senior Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.
Endnotes:
[1] Apart from President Xi Jinping it includes following 22 President/PMs of BRI participating countries: President Alberto Fernández of Argentina, President Gabriel Boric Font of Chile, President Denis Sassou-N’Guesso of Congo, President Joko Widodo of Indonesia, President Kassym-Jomart Tokayev of Kazakhstan, President William Samoei Ruto of Kenya, President Thongloun Sisoulith of Lao PDR, President Khurelsukh Ukhnaa of Mongolia, President Vladimir Putin of the Russian Federation, President Aleksandar Vučić of Serbia, President Ranil Wickremesinghe of Sri Lanka, Chairman of the Halk Maslakhaty Gurbanguly Berdimuhamedov of Turkmenistan, President Shavkat Mirziyoyev of Uzbekistan, President Vo Van Thuong of Viet Nam, Prime Minister Hun Manet of Cambodia, Prime Minister Mostafa Madbouly of Egypt, Prime Minister Abiy Ahmed Ali of Ethiopia, Prime Minister Viktor Orbán of Hungary, Prime Minister Adriano Afonso Maleiane of Mozambique, Prime Minister Anwaar-ul-Haq Kakar of Pakistan, Prime Minister James Marape of Papua New Guinea, Prime Minister Srettha Thavisin of Thailand. Source: Chair’s Statement of the Third Belt and Road Forum for International Cooperation, 18 October 2023, Beijing https://english.news.cn/20231019/d7789e41f470421e82cc53abe859e1ab/c.html
[i] “Full text: The Belt and Road Initiative: A Key Pillar of the Global Community of Shared Future”, Beijing October 10, 2023 available at https://news.cgtn.com/news/2023-10-10/Full-text-China-releases-white-paper-on-Belt-and-Road-cooperation-1nMwG1FHWLu/index.html accessed on December 2, 2023
[ii] Ibid
[iii] Ibid
[iv] Christoph Nedopil Wang Five takeaways from China’s BRI engagement in 2022 https://pandapawdragonclaw.blog/2023/02/24/five-takeaways-from-chinas-bri-engagement-in-2022/#:~:text=Investments%20involve%20equity%20investment%20and,EPC%20and%20EPC%2BFinance%20contracts.
[v] “Why China is Rebooting the Belt and Road Initiative” October 26, 2023 available at , https://www.usip.org/publications/2023/10/why-china-rebooting-belt-and-road-initiative,accessed on December 1, 2023.
[vi] ANI “Philippines to exit from China's Belt and Road Initiative” available at
http://timesofindia.indiatimes.com/articleshow/104951862.cms?from=mdr&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
[vii] FMPRC “Remarks by H.E. Wang Yi at the Press Conference of the Third Belt and Road Forum for International Cooperation”, available at https://www.fmprc.gov.cn/eng/wjdt_665385/zyjh_665391/202310/t20231020_11164742.html, accessed on December 2, 2023
[viii] For details regarding high level participation see Ashok Sajjanhar “Why China hosted Third Belt and Road Forum lost its shine>, https://www.indianarrative.com/opinion-news/why-china-hosted-third-belt-and-road-forum-lost-its-shine-153282.html, accessed on December 2, 2023
[ix] FMPRC “Building an Open, Inclusive and Interconnected World
For Common Development” available at https://www.fmprc.gov.cn/eng/wjdt_665385/zyjh_665391/202310/t20231018_11162854.ht, accessed on December 2, 2023
[x] “Silk Road Investment Fund Working Capital Increased By US$11 Billion” available at https://www.silkroadbriefing.com/news/2023/10/25/silk-road-investment-fund-working-capital-increased-by-us11-billion/#:~:text=The%20Silk%20Road%20Fund%20is,explicit%20geo%2Deconomic%20strategic%20mission. Accessed on December 8, 2023.
[xi] “Winning friends by training workers is China’s new gambit” The WAshiongton PosT, Julyn10, 2023 available at https://www.washingtonpost.com/world/interactive/2023/china-luban-workshops-global-influence/ accessed on December 2, 2023
[xii] “CASS unveils research outcomes on BRI”, available at http://english.cssn.cn/whats_new/topline/202311/t20231124_5698771.shtml, accessed on December 5, 2023
[xiii] See for example, Sanjeev Kumar (ed) China’s BRI in Different Regions of the World: Cooperation, Contradiction and Concerns (ICWA:KW 2022).
[xiv] “Pakistani Taliban threatens to attack China’s Belt and Road route unless 'tax' paid”, The Telegraph, November 25, 2023 available at https://www.telegraph.co.uk/world-news/2023/11/25/pakistan-taliban-demands-tax-china-extortion-belt-road/#:~:text=Download%20our%20app-,Pakistani%20Taliban%20threatens%20to%20attack%20China's,Road%20route%20unless%20'tax'%20paid&text=The%20Pakistani%20Taliban%20threatened%20to,cent%20tax%20on%20the%20construc accessed on December 6, 2023
[xv] Xinhua “China releases document on vision, actions for Belt and Road cooperation in next decade” Beijing, 24 November 2023, available at https://english.news.cn/20231124/5e7344558a424dfd8d23357364d51181/c.html. accessed on accessed on December 2, 2023
[xvi] “China unveils vision and action plan for the BRI development in next decade” Global Times, Beijing, 24 November 2023, available at https://www.globaltimes.cn/page/202311/1302449.shtml, accessed on December 2, 2023