Revamping the Belt and Road: China’s Continued Influence Campaign
The Belt and Road Initiative (BRI), a massive infrastructure and investment program initiated by Chinese leader Xi Jinping, has become a crucial part of China’s foreign policy. In the past decade, many emerging economies in Africa, Asia, and Latin America have embraced BRI, due to China’s no-questions-asked lending approach and its financial firepower. However, this lending wave has now declined significantly, due to China’s domestic economic issues, new regulations on overseas investment, and several high-profile failures in BRI projects.
China is still committed to the BRI, but it has taken a different approach, focusing on developing organic ties in trade, telecommunications, green energy, and academia. Policymakers across the world should be aware of this change and exercise caution when seeking financing from China. Beijing is less likely to fund big infrastructure projects and its influence is shifting from mega-projects to more sustainable engagement. It is also important for the US and its industrialized partners to address the negative impact of BRI, such as corruption, anti-democratic practices, and huge debts for recipient states.
The Belt and Road Initiative (BRI) was initially viewed as a game-changer by analysts globally as a result of China’s high spending on overseas development compared to the United States. China’s lending program aimed at helping developing countries with their infrastructure needs came at a cost as it allowed authoritarian leaders to use it as a financial backstop for their anti-democratic policies. The BRI’s financial commitments have significantly decreased over the past years, dropping by 94% from 2016 to 2019. The decline in lending is due to a combination of factors both inside and outside of China, making it unlikely that China will seek to revive the BRI’s infrastructure lending to its previous scale in the near future.
However, the United States and its industrialized partners still face a challenge in coping with China’s revised approach to the BRI. They must revise their own development strategy to meet the demands for infrastructure and democratic accountability in the developing world and also help these partners deal with Beijing’s approach. The United States and its allies must also be prepared for the new challenges posed by China’s expanded economic reach and its potential to deepen democratic backsliding worldwide.