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Global development with Chinese characteristics: 10 years of Belt and Road


Global development with Chinese characteristics: 10 years of Belt and Road

Photo: The Russian Presidential Press and Information Office/Wikimedia Commons


Through the BRI framework, Chinese banks have loaned out $1 trillion to developing countries over the past 10 years to help spur China’s economy. As the BRI enters its second decade, it has evolved into a powerful foreign policy tool to advance Beijing’s ambition to reform the existing international governance system.


– China’s $1 trillion infrastructure development initiative was designed to be profitable and expand the country’s economy
– As the BRI enters its second decade, it has been supplemented by additional global initiatives that help drive Beijing’s ambitions in global development, security and governance
– Beijing will increasingly utilize established BRI mechanisms to push its vision for a new global governance model, with itself at the center

Celebrating 10 years of BRI

On October 17-18, 2023, China hosted the Third International Belt and Road Forum in Beijing, which celebrated ten years since the inception of the Belt and Road Initiative (BRI). Over the past decade, around $1 trillion were invested in BRI-related projects. Ports, railways and power stations have been constructed across the world with the help of Chinese companies and using Chinese financing.

Leaders from mainly developing countries attended the celebrations. Among them were Indonesian President Joko Widodo, Sri Lankan President Ranil Wickremesinghe, Syrian President Bashar al-Assad and, most prominently, Russian President Vladimir Putin. Hungary’s Prime Minister Viktor Orban and Serbian President Aleksander Vucic were the only Western leaders to attend. The EU’s foreign policy chief Josep Borrell had been in Beijing for high-level talks, but left just ahead of the summit.

President Putin was likely among the reasons Western leaders declined to show up. The BRI has been celebrated as a great success in China, where it is held up as proof of China being a responsible global actor and crucial benefactor to the developing world. In the West, however, the BRI has been viewed with increasing suspicion. 

Of the 18 EU countries that initially signed up with the BRI, only Hungary remains an active partner. Italy, which had been the only G7 country to join, recently chose to withdraw. Italian Prime Minister Giorgia Meloni admitted that joining the BRI in 2019 had been a “big mistake,” as Italy’s trade deficit with China skyrocketed since then.

Accusations of China instrumentalizing the BRI for political and geostrategic gains have mounted. To understand what made China’s BRI so divisive, it is important to take stock of its first ten years. 

One belt, one road

On September 7, 2013, Xi Jinping gave a speech at Nazarbayev University in Kazakhstan and introduced the world to China’s project of an “economic belt along the silk road.” 

A month later, Xi gave another speech at the Indonesian parliament, where he vowed to build a “maritime silk road of the 21st century.” Within a year, these two concepts were merged into “One Belt, One Road.” To make the project sound less China-centric, its English title was changed to “Belt and Road Initiative” in 2015, while the original name remained in Chinese.

In the following years, hundreds of billions of dollars were invested in a series of mega-infrastructure projects, such as the massive China-Pakistan Economic Corridor (CPEC), which was created with the promise of industrializing Pakistan and connecting China to the Arabian Sea. The BRI also helped to construct a series of railway lines across African states, among others.

Most of the development was financed through loans made by Chinese banks. Beijing has promoted the BRI as an alternative to the World Bank, the IMF and Western-led lending in general. It has also touted the added benefit of not forcing Western values on developing countries. Over 150 countries, mainly from Asia, Africa and Latin America, signed up with the BRI, including virtually all developing nations. Several European countries were once eager to benefit.

The Greek port of Piraeus was held up by Beijing as a major example of the BRI’s success in Europe. Before the Chinese shipping giant COSCO started investing there, it barely made the top-100 of the world’s largest container ports. Under COSCO’s leadership, Piraeus expanded rapidly and became one of Europe’s busiest ports. 

The economic potential of the BRI laid the foundation for expanded Chinese-European cooperation, including through the 17+1 forum, which brought many Eastern and Southeastern European countries into one forum with China. 

However, much of the hoped-for cooperation has ended. The 17+1 is now defunct and people across Europe, including in Greece, are highly skeptical of China’s intentions in Europe. The only two countries still publicly eager to work with Beijing are Hungary and Serbia. Even across the developed world, economic benefits brought about by the BRI have proven illusory.

Beijing has frequently used the BRI as an example of Chinese benevolence and even a form of development aid, while downplaying economic benefits to China. 

In reality, the BRI is designed for the benefit of the Chinese economy. The far majority of China’s multi-billion investments come in the form of Chinese loans, which the recipient countries have to pay back. The infrastructure developing countries are buying with these loans are built using Chinese machinery and manpower. In several cases, countries have become massively indebted to China, due to expensive mega-projects that turned out far less beneficial than expected.

A study by AidData that analyzed over 13,000 BRI projects across 165 countries, worth a total of $843 billion, found that over a third of projects ran into serious troubles, including labor violations, corruption scandals, public protests and serous environmental issues. The average BRI infrastructure project also takes a third longer to complete than comparable non-BRI projects and is more likely to be shut down due to aforementioned issues. 

One particular area of contention is the cost of BRI projects. Infrastructure development projects in developing countries are generally financed with the help of international loans at low interest rates and reasonably long repayment periods. The average loan given to low- or middle income countries by an OECD country has an interest rate of 1% and a repayment period of 28 years. However, the average BRI loan has a 4% interest rate and needs to be repaid within 10 years. In summary, BRI loans are created to be profitable.

Nonetheless, BRI loans have been popular, particularly in developing countries that are unable to obtain credit otherwise. Loans by the IMF or World Bank are generally tied to strict conditions to ensure the financed projects are economically sound, while also promoting democracy and minimizing the chances for corruption in the recipient country. Chinese loans have no such requirements. As a result, 42 countries now carry debt of at least 10% of GDP to China. 

There have been several examples of countries being unable to repay their debt and China seizing control of assets in lieu of payment. Perhaps the most controversial example is the Hambantota Port in Sri Lanka. After the Sri Lankan government had become unable to service its massive debt, it signed over 85% of port ownership to China Merchants Port, a Chinese state-owned enterprise. This has led to some accusing Beijing of purposefully setting so-called “debt traps”.

There is little evidence to support the debt trap hypothesis. Chinese loans carry high interest rates to be profitable and in most cases collateral is agreed to be in liquid assets, such as for resource extraction rights, to make up for lost loan repayments. Still, an increasing number of countries have struggled to repay their debt to China. In the three years from 2020 to early 2023, $78 billion in debt owed to China had to be renegotiated, due to repayment issues. To improve vetting and avoid future repayment issues, BRI loans have now become more difficult to obtain.

Another frequent issue has been that many large-scale BRI projects promised far greater economic benefits to the host countries than they ended up delivering. Most of the Chinese companies working on such projects overwhelmingly employ Chinese citizens. Even after completion, many projects provide few opportunities for the locals. 

The recently opened high-speed China-Laos Railway is one example. Not only were the tunnels dug and rails laid by Chinese workers, but railway stations in Laos and even areas surrounding them are now being guarded by Chinese security companies. In effect, Chinese companies are now in charge of public security in parts of Laos. 

Furthermore, while Laos had to pay for much of the railway, the project will ultimately benefit China the most, once it is connected to Thailand, Malaysia and Singapore. Meanwhile, Laos has an estimated debt-to-GDP ratio of 120%, the majority of which is owed to China. The local currency—the Laotian Kip—has depreciated by almost half over the past year, calling into question whether the country will be able to service its debt.

Other examples of countries in serious debt distress to China include Pakistan, Kenya, Zambia, Angola, Ethiopia and Mongolia, among others. In Pakistan, the CPEC mega-project failed to attract the expected economic benefits and instead significantly raised the government’s debt burden, while millions of workers lost their jobs due to electricity having become too expensive to keep factories running. 

In Kenya, a $5 billion railway once promised to connect the Kenyan port city of Mombasa with Uganda, but after running over budget and into repeated delays, the line now ends some 200 miles from the Ugandan border. Meanwhile, the Kenyan government had to hold back paychecks for public servants to make its loan repayments. 

Zambia, after borrowing billions from China for infrastructure projects, was forced to suspend payments for social services, farm subsidies and healthcare. Even so, the government became unable to service its debt. Because Chinese lenders refused to budge and Zambia was not allowed to disclose its loan agreements to third parties, it could not seek loans from other countries and had to default on its debt during the height of the COVID-19 pandemic. The country was thus locked out of future international credit, thereby worsening the situation. Inflation rose by 50%, unemployment soared and economic growth stalled. 

As these and other developing countries’ debt to China ballooned, China also increasingly rivaled the IMF to become the world’s largest lender of last resort. China lent over $200 billion in bailout loans between 2016 and 2021, almost exclusively to countries already heavily indebted to China. China is, in effect, bailing out its own banks. It does so at an average interest rate of 5% to the debtor countries, which is more than double that of an IMF bailout loan. Nonetheless, many countries have no choice but to agree to China’s terms.

BRI loan agreements with Chinese lenders are commonly kept secret and debtor governments are prohibited from disclosing the terms. In addition, the loans are often structured in a way that they do not appear on countries’ balance sheets, thereby artificially reducing a country’s debt. China tends to refuse reducing or cancelling existing debt and often stipulates that the debt owed to it be prioritized. This has caused Western lending institutions to refuse bail outs to countries indebted to China, as provided funds flow directly to Chinese creditors, instead of aiding the distressed country’s economy.

The emergence of these issues has tainted China’s BRI and called into question Beijing’s narrative of the BRI as a “public good” to the world. Nonetheless, the BRI will continue into its next decade and Beijing is already working on expanding its scope and reach. Several new initiatives were introduced to polish China’s image and bolster its global influence. 

The new global initiatives

In January 2017, while at the United Nations (UN) in Geneva, Xi announced China’s engagement in “building a community of shared future for mankind.” The essence of this approach was helping the Global South to develop, while allowing each developing country to “independently choose its social system and development path.” The BRI, he noted, aimed at achieving this goal. 

Since then, Beijing has taken a step back from promoting the BRI and instead introduced three new initiatives. These are the Global Development Initiative, the Global Security Initiative and the Global Civilization Initiative. Unlike the bilateral-focused BRI, these new initiatives have been anchored within the multilateral framework of the UN, albeit still fully controlled by China.

The Global Development Initiative (GDI) was introduced by Xi at the 76th UN General Assembly Session in New York, in September 2021. It has been placed firmly within the UN framework, with the declared purpose of helping to achieve the UN’s Sustainable Development Goals. It does so by entirely focusing on economic development, instead of political, civil or human rights, which Western states tend to emphasize.

China quickly raised the GDI’s legitimacy by setting up the Group of Friends of the GDI, a forum for which around 70 countries have signed up. The BRI provides the usual mechanisms to realize the GDI’s underlying projects and provide loans, but, this time, with the support of the UN. UN Secretary General Antonio Guterres has repeatedly praised the GDI.

The Global Security Initiative (GSI) was introduced in April 2022. With the lofty vision of promoting “world peace and development,” it remains vague in its concrete objectives. In essence, the GSI represents Beijing’s ambition to become a major player in international security, although without any institutional framework so far. 

Apart from offering an alternative to US-led security mechanisms, including NATO, the GSI’s focus lies on China’s principle of absolute non-interference in domestic affairs. To Beijing, this also includes territories it claims, foremost Taiwan and the South China Sea. Interference in a country’s domestic affairs based on claims of human rights violations are generally rejected by Beijing.

The GSI’s main focus currently appears to be on the Middle East and Africa. Beijing has also claimed successful applications of the GSI across many differing areas related to its multilateral security dealings, including the China-mediated Iran-Saudi Arabia rapprochement, Beijing’s peace plan proposal for Ukraine and even for having “injected positive energy into the efforts to uphold Africa’s security and stability.” In reality, the GSI remains a vague concept loosely applied by China’s leadership. But despite its lack of substance, Beijing will likely find plenty of support for the GSI from those countries who feel abandoned by Washington.

Finally, the Global Civilization Initiative (GCI) completes Beijing’s comprehensive approach to global China-led development. The GCI is both the newest and the most amorphous of China’s big initiatives. Xi Jinping introduced it in March 2023, the same month as US President Joe Biden held his Summit for Democracy, which representatives of 83 countries attended. China was not invited.

The GCI anchors countries, and by extension their governments, in their thousands-years-old civilization. It is a framework for cooperation that rejects universal values, including human rights, democratic representation and the right to self determination, which Beijing sees as Western values, imposed on the world. Compared to the Chinese civilization, which Beijing officially states as being 5,000-years old, such values are recent inventions. Longevity can also be claimed by many other civilizations around the world. 

See Also

According to the GCI, different civilizations perceive values differently and have varying forms of governance, all of which are deeply rooted in history and as such must be respected. Therefore, calling out a government’s human rights abuses or their lack of democracy is not an attack against that government, but against the entire civilization that underlies it. Interference in foreign civilizations amounts to colonialism. This narrative of a clash of civilizations is appealing to autocratic states, in which almost three-quarters of humans live and which commonly use historical narratives to justify their rule.

The GDI, GSI and GCI are tightly linked with one another and complement the BRI. This has been repeatedly made explicit by the Chinese government, as part of achieving a “shared future for mankind.” This “shared future,” alongside the global initiatives’ stated purposes, are means to achieve Beijing’s ultimate goal. According to Xi, China must lead the way in “advancing the reform of the global governance system.” 

China’s global initiatives form the blueprint for how Beijing wants to change the international system into one with absolute state sovereignty and in which economic growth and social stability are the only real measures for human wellbeing. It is also a system with China at its center and a diminished role for the US. These ambitions by the Chinese government form the foundation for the next decade of Chinese-led global development.

The next 10 years

Beijing has struggled to maintain the BRI’s upbeat narrative of being a major contributor to wealth creation in the Global South. Following the 2023 BRI Forum’s opening, China’s media focused on the hundreds of delegates from 140 countries attending. However, only 23 national leaders were among them, far fewer than in previous iterations of the Forum. Western countries are likely to continue shunning the BRI and related events. Moreover, the West is increasingly challenging China’s trillion-dollar development initiatives. 

In June 2022, the G7 launched its Partnership for Global Infrastructure and Investment, which aims to raise $600 billion in investments for infrastructure in developing countries. Apart from traditional transportation infrastructure, the G7 initiative also covers areas such as green energy technologies, digitalization, and cyber security. Its leaders promise a sustainable alternative to China’s BRI.

There is also the EU’s Global Gateway. Launched in late 2021, it will raise around $300 billion for similar development initiatives under the banner of “Team Europe”. The Global Gateway is not quite as impressive as touted by Brussels, as it mostly repurposes existing EU mechanisms and funds. However, the fact that the EU saw the need for combining its development cooperation and infrastructure investment projects into one mega initiative shows China’s lasting influence. 

The EU and the G7 are likely to follow in Beijing’s footsteps and promote their development initiatives more publicly to gain influence in the developing world. If their funding is as plentiful as promised and the infrastructure projects economically sound, they could succeed in challenging Beijing’s narrative of being the Global South’s major benefactor.

However, Western countries will likely continue to focus on human rights and democratic values, which includes limiting autocrats’ access to funds. Meanwhile, Beijing will continue to promote a value-free approach, claiming that it champions multilateralism and inclusiveness. Given that less than half of the countries represented in the UN can be considered democratic, this will likely continue to play into Beijing’s hands. 

As such, the BRI will continue to be a crucial Chinese foreign policy tool, albeit with some realigning. Loans will be increasingly difficult to obtain to ensure economic viability of projects and the average project will likely be smaller and more frequently focus on sustainability and high-tech. The BRI Forum is also here to stay. Plans to establish a permanent secretariat for the forum have recently been announced.

Beijing’s rhetoric in domestic media will likely also change. After a decade of promoting the BRI as China’s gift to the world, most Chinese believe that it is a form of Chinese development aid. This worked well while China’s economy was booming and the lives of ordinary Chinese kept improving. But now that the economy is struggling and unemployment rates among young Chinese are soaring, the BRI has become unpopular at home. Therefore, Beijing will likely become increasingly blunt regarding the BRI’s economic benefits to China.

Ahead of the BRI Forum in October, China’s State Council released a white paper, which detailed China’s shift in focus away from large-scale infrastructure projects and towards smaller, greener and more technology-centered projects, including building digital infrastructure. Given China’s world-leading status in green technologies, including energy generation and storage, as well as electric vehicles, China will certainly garner interest from developing countries. At the BRI Forum, Xi again confirmed this new focus.

While the white paper still emphasizes the BRI being a global “public good,” it is also packed with phrases emphasizing “mutual benefits” and “win-win cooperation.” The paper also clearly re-stated Beijing’s aim to use the BRI, together with GDI, GSI and GCI, for “improving global governance.” China’s global initiatives will continue to be at the center of this ambition. Whenever necessary, these initiatives will likely be supplemented by additional ones, such as the brand-new artificial intelligence (AI) initiative, which Xi just introduced at the Forum.

The Global AI Governance Initiative opposes current Western-centered approaches to AI governance and takes aim at the US’s sanctions on AI technology against China. While the initiative has the stated goal to foster multilateral cooperation on AI “for the good of humanity,” signing up to it also implies siding with China, and against the US, on this matter.

Another example is China’s Global Data Security Inititiative (GDSI), which Beijing frequently promotes at the UN as an alternative model to the existing consensus on the internet having to be “fair, free and open.” Instead, the GDSI suggests that states should have complete sovereignty over all forms of data that originates within their territory or pertains to its citizens. It represents Beijing’s attempt at utilizing the UN framework to change global internet governance.

Beijing will continue to publicly champion multilateralism and tout cooperation on an equal footing with all countries, thereby opposing the US’s exclusive alliances and Western-imposed values. However, by the sheer size of China’s economy and increasing military might, Beijing ensures that it is always first among equals in any forum it is part of. One example is the BRICS group, which now includes around half of the world’s population among its eleven members. Nonetheless, China makes up two-thirds of the group’s GDP and, in effect, controls its agenda. China will increasingly utilize the BRICS, and other groupings it is part of.

Beijing’s utmost focus will continue to be on the UN, which is crucial to reform the global governance system in its own image. It has been successful in expanding its reach as the self-declared leader of the Global South. Beijing’s growing clout in the UN means that simply excluding China from Western-led forums, as has been practiced by Washington, will not suffice in curbing its influence. 

While Western leaders shunned the 2023 BRI Forum, UN Secretary General Guterres attended and even gave a speech in which he congratulated Xi for his “steadfast commitment to multilateralism, to international cooperation and to the United Nations.” Such praise is the result of China’s successful promotion of its global initiatives, especially the GDI.

Most Western governments are skeptical of Beijing’s intentions in the international system and agree on the need to reduce dependencies from China, but they have not succeeded in convincing the Global South. If the US and its allies want to win over the developing world, they have to give a viable alternative to Beijing’s development initiatives. Championing norms such as democracy and human rights, and condemning Beijing for violating them, will not be enough. Beijing knowns this. 

In a September 2023 State Council policy document, entitled “A Global Community of Shared Future,” Beijing criticized the “so-called universal values,” which it decries as having been “defined by a handful of Western countries.” How the BRI’s second decade turns out, and whether the current international system will survive, may in large part depend on whether those handful of Western countries are able to convince the rest of the world of the importance of these values.

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