Is China’s development juggernaut gasping for breath?
Into its 10th year, China’s Belt and Road Initiative (BRI) isn’t a project of just steel and concrete. Due to its collaborative features of connectivity, economic integration, infrastructure development, and poverty alleviation, as well as by institutionalizing concepts of clean, green, and digital technology – it has developed into an iconic brand for mutual growth, prosperity, and cooperation among the member states.
According to a report by Professor Dr. Christoph Nedopil, who simultaneously works with the Chinese Ministry of Commerce and leading international financial institutions, such as Asia Development Bank, World Bank’s International Finance Corporation, and United Nations Economic and Social Commission for Asia and the Pacific, cumulative BRI engagement by the end of 2022 had reached $962 billion. The lead author of the UDP SDG Finance Taxonomy reported a resonant 3,450% and 7,536% growth in finance and technology, as well as a 50% expansion in green energy engagement last year.
The world response to the BRI is overwhelming. Some 147 countries, covering roughly two-thirds of the world population and 40% of the global GDP, have joined the initiative. By 2022, trade volume between China and the BRI countries had almost doubled from just over $1 trillion in 2013 to more than $2 trillion in 2022 at an average growth rate of 8%.
Bilateral investments surpassed $270 billion; the Chinese companies created some 421,000 jobs for local communities, helping lift nearly 40 million people out of poverty. This is in line with the World Bank’s estimate, which, in a 2019 policy research working paper, predicted the initiative had the potential to cut extreme and moderate poverty by 7.6 million and 32 million respectively.
The BRI projects are criticized for mounting heavy debt burdens on the developing countries of Asia and Africa; this criticism disregards the destination states' own penchant for trade-not-aid in an attempt to establish their "identity" as a trading nation. The latest findings reveal that almost all countries have benefitted, whether it be the world-class infrastructure, improved connectivity, or increased trade and investment with China, from the project.
In sharp contrast to the prevailing wisdom in the West, “the project of the century” isn’t losing its luster, gasping for breath, or running out of steam. Host countries, such as Malaysia and Pakistan, today are less incredulous and more unequivocal that the BRI is transparent, denying perceptions of the “Chinese debt trap” as “concocted.”
Even academics at top US institutions, who cite Chinese companies and the member countries' “overzealous engagement” as a reason for the BRI stagnation, do not buy the argument that the project involves “malicious or predatory lending.” Researchers of the China-Africa Research Initiative (CARI) at the John Hopkins University recently evaluated China’s participation in the G20 Debt Service Suspension Initiative for Africa and concluded that Beijing “fulfilled its role fairly well as a responsible G-20 stakeholder.” Although the Chinese creditors accounted for just 30% of the claims, they contributed to 63% of the debt service suspensions.
Some developing countries, such as Sri Lanka, struggled in paying off their debts; it was largely because of their political decisions and domestic infighting. A briefing paper, authored by the Sri Lankan scholars Umesh Moramudali and Thilina Panduwawala and published by the CARI in November 2022, spurned the notion of branding Colombo as a victim of Beijing’s debt trap. Still, quite a few in America including the US State Department officials absurdly single out China for putting Sri Lanka “straight on a path toward Sino state-status” and piling up debt “elsewhere".
Amid attempts to belittle the advantages of the BRI for Europe, the China-Europe Express Train (CEET), especially after the implementation of the BRI, has become an important trade route and a symbol of booming development for the region. The train as of 2022 had run 65,000 trips and shipped six million TEUs (twenty-foot equivalent units) of freight valuing $300 billion, in addition to connecting more than 200 cities in 24 European countries.
The CEET is thus helping to increase trade, boost the economies of China, Central Asia, and the European countries, as well as contribute to the well-being of the people across China, the Central Asia states, and the European countries. In this vein, the BRI is a project of every participating nation and an insignia of peace for it also promotes people-to-people and cultural exchanges between the two continents.
A flurry of the European Union leaders’ visits to Beijing and the welcoming of the call between Chinese President Xi Jinping and Ukrainian President Volodymyr Zelensky by Brussels demonstrate that the two sides are willing to resolve the Ukraine conflict and strengthen their economic relationship. As there isn’t a short-term solution to the crisis, leaders of the two leading economies should look to manage differences, foster engagement, and work together for peace and economic resilience.
The US antagonism toward the BRI and propagation of the project as China’s “debt trap diplomacy” has an explicit motive. Many in the US see China’s rise as a threat to America's economic and financial dominance or Bretton Woods through which officials of the developing states believe that the country accumulated global wealthand imposed its political philosophy on them.
For most of these nations, Washington’s criticism of the BRI is meaningless rhetoric while offering a series of millstone initiatives, including G7's Build Back Better World and Partnership for Global Infrastructure and Investment that merely focus on rivaling the BRI in a bid to obstruct China’s rise without addressing their development challenges.
As the Chinese development juggernaut makes sustained progress and powers global green and digital growth by leading in areas including renewable energy, high-speed railway, and 5G networks – arguments, such as momentum behind the BRI is slowing and its characterization as a “debt trap,” lead astray.
Trade remains a “force of resilience” in the global economy, said the Director-General Ngozi Okonjo-Iweala of the World Trade Organization last month as her institution revised the international trade growth forecast from 1.0% to 1.7% in 2023, thanks to its “pent-up” consumer demand in China. This as well as Beijing’s role as a “world builder” and robust trade with the world and BRI countries between January and April substantiates the vitality of China and the BRI for the international economy and global development.