Is China’s Trillion-Dollar Bet on the Belt and Road Initiative Paying Off?

China is celebrating a remarkable milestone with the grand 10th-anniversary celebration of its Belt and Road Initiative (BRI), a massive global engagement project. Dignitaries from around the world have gathered in Beijing, including Russian President Vladimir Putin, Hungarian Prime Minister Viktor Orban, and even representatives from the Taliban government. The BRI, a brainchild of President Xi Jinping, aims to foster closer ties between China and the world through investments and infrastructure projects. It’s a massive gamble, but has it paid off?

Is it a Success? The BRI was launched in 2013 with vast ambitions. The “Belt” refers to overland routes connecting China to Europe, South Asia, and Southeast Asia. The “Road” is a maritime network linking China to ports across Asia, Africa, and Europe. The initiative started with huge investments in foreign infrastructure, primarily in energy and transportation projects like power plants and railways.

China pitched it as a win-win, promising development for partner nations and economic benefits at home. It achieved some goals, such as internationalizing the yuan, but where it really succeeded was in trade. China gained access to vital resources like oil, gas, and minerals. Around $19.1 trillion in goods have been traded between China and BRI countries in the past decade.

Debt Concerns China has become the world’s largest international creditor, largely due to the BRI. Many countries are now grappling with BRI-related debt. This has also created challenges within China, as the country faces a domestic debt crisis. China has restructured BRI loans, but debt cancellation is off the table.

Critics have accused China of luring poorer countries into expensive projects, raising concerns about sovereignty. Some projects have been criticized for being wasteful, corrupt, and environmentally harmful. A few countries have even canceled their BRI deals.

Diplomatic Influence Despite its challenges, the BRI has expanded China’s global influence. It’s not just about infrastructure; it’s about projecting soft power and positioning China as a leader in the Global South. Many countries now have more favorable attitudes toward China.

However, concerns have been raised about economic coercion, where nations feel compelled to align with China’s agenda to secure Chinese investment. China’s use of the BRI in diplomatic maneuvering is also a point of contention.

Future Outlook China acknowledges the need for change. They’re shifting toward low-investment, high-yield projects and a “digital silk road.” The financing is being reduced, and China is inviting other countries and banks to contribute.

The BRI remains a potent tool for China, but whether the world wants a Chinese-led global order is a question that still looms large. China sees its approach as a more inclusive and less judgmental form of globalization. It’s a view that may shape the future of global engagement.

Also read: Global Debt Reaches Record $307 Trillion in 2023, According to Institute of International Finance