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10 Years of China’s Belt and Road Initiative (BRI)

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October 30, 2023

Why in news?

The year 2023 marks a decade since China’s ambitious infrastructure funding project, the BRI, was first outlined by President Xi Jinping.

What is BRI?

  • ‘Belt’ Plan- President Xi Jinping announced the Silk Road Economic ‘Belt’ during his visits to Kazakhstan in 2013.
  • It was to revitalise a series of trading and infrastructure routes between Asia and Europe.
  • Connectivity through Central Asia was a key element of the initiative.
  • ‘Road’ Plan A sea trade infrastructure called ‘Road’ was announced to connect China with Southeast Asia, Europe and Africa.
  • The major focus has been to build ports, bridges, industry corridors, etc. throughout South East Asia and Indian Ocean.
  • Together, these initiatives were referred to as the One Belt One Road Initiative (OBOR).
  • Aim of BRI - China wanted to
    • Resolve capital surplus and industrial overcapacity
    • Increase its political influence in broader regions
  • Corridors - The initiative includes 6 international corridors.

belt-and-road-initiative

  • Principles of BRI
    • Policy coordination
    • Infrastructure connectivity
    • Trade
    • Financial integration
    • People-to-people connections
    • Industrial cooperation
  • Main channels for BRI financing - China-headquartered Asian Infrastructure Investment Bank (AIIB) and Silk Road Fund (SRF)
  • BRI Forums - China has hosted 3 BRI Forums in 2017, 2019, and 2023.

Main Takeaways from China’s Belt and Road Forum 2023

  • The Forum focused on the theme, ‘High-quality Belt and Road Cooperation: Together for Common Development and Prosperity.’
  • The main takeaways from thematic discussions include
    • Promoting unimpeded trade
    • Enhancing maritime cooperation
    • Promoting a clean silk road
    • Developing a digital economy as a new source of growth
    • Strengthening think tank exchanges
    • Enhancing people-to-people exchanges
    • Strengthening subnational cooperation

What is the China’s view on BRI?

  • Project of the century - In 2017, Xi dubbed BRI as the “project of the century” and it is a part of his long-term dream of a China-dominated world.
  • It was reported that 3,000 BRI projects valued at $1 trillion, are currently underway across the globe.
  • Economic development - According to a report by the World Bank, the BRI increased the trade of participating parties by 4.1%, attract 5% more foreign investment, and levelled up the GDP of low-income countries by 3.4%.
  • Employment - By 2022, Chinese enterprises’ investment in the cooperating countries has created 421,000 local jobs, with more than 3,000 projects being implemented.
  • Connectivity - It facilitated connectivity between China and countries in 5 priority dimensions of policy, infrastructure, trade, finance and people-to-people ties.
  • Geopolitical leverage - The BRI has already cultivated substantial diplomatic and geopolitical leverage for China within the Global South.
  • Others -The communication and cooperation in education, culture and tourism are enhanced, people-to-people exchanges and mutual learning among civilizations along the route also flourished.

Apart from the BRI, Chinese President also proposed 3 other Initiatives over the years - Global Development Initiative, Global Security Initiative and Global Civilization Initiative.

What are the criticisms against BRI?

  • Funding - With China's slowing economic growth, the volume of projects and the amount of money going into the BRI have stagnated.
  • Italy’s case - Italy’s possible departure from the BRI will be a symbolic setback as it was the only G7 country which had formally joined the initiative.
  • Debt crisis - The economic non-viability of many projects is questioned as it had led to “debt trap” situations in countries like Sri Lanka.
    • Malaysia cancelled $22 billion worth of BRI projects, citing inflated prices.
  • Nature of contracts- The inflexible nature of BRI contracts, where credit is extended at close to market rates, and debt cancellation or restructuring rarely included, has been a major impediment.
  • Transparency - The lack of transparency regarding the financing raises questions about the long-term implications of BRI.
  • India’s view- India opposes this project as China Pakistan Economic Corridor (CPEC) passes through Pakistan occupied Kashmir, infringing on India’s sovereignty and territorial integrity.
  • De-risking - European nations are trying to reduce their dependence on China amid a Western push to de-risk supply chains, alongside growing geopolitical tensions with Beijing.

China Pakistan Economic Corridor (CPEC)

  • Announced in - 2013 as a part of BRI
  • Location - Enters Pakistan Occupied Kashmir (PoK) through the Karakoram Highway in Gilgit Baltistan.
  • Investment- $60 billion
  • Aim- It is 3000km long which is initiated to
    • To circumvent the Straits of Malacca and the South China Sea
    • To improve infrastructure within Pakistan for better trade with China and to further integrate the countries of South Asia
    • To connect the deep-sea Pakistani ports of Gwadar and Karachi to China’s Xinjiang province and beyond by overland routes.

cpec

What lies ahead?

  • Faced with a challenging geopolitical and economic landscape, China is now adjusting its ambitions, aiming to pivot towards green and smaller-scale development projects.
  • Other potent alternatives for BRI are as follows.

 

References

  1. Indian Express | 10 years of China’s Belt and Road Initiative
  2. Business Standard | BRI: Ten years after
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