What is the Belt and Road initiative? | CNBC Explains

Summary

The Belt and Road Initiative (BRI), launched by China in 2013, marks a major shift in China’s foreign policy from a low-profile approach to a global economic powerhouse. Spanning over 65 countries, it aims to strengthen trade, infrastructure, and investment, with projects like railways, ports, and airports. However, concerns about debt traps, political influence, and geopolitical ambitions have sparked debate. Critics argue that the initiative may financially burden participating countries, leading to dependency on China. While BRI continues to reshape global trade, its long-term impact on global relations and security remains uncertain.

Takeaways

• 😀 China’s Belt and Road Initiative (BRI) marks a major shift in its foreign policy, moving away from Deng Xiaoping’s strategy of keeping a low profile in international affairs.
• 🌍 The Belt and Road Initiative was announced in 2013 by President Xi Jinping, aiming to strengthen global trade, infrastructure, and investment links between China and 65+ countries.
• 💰 The Belt and Road Initiative potentially involves countries accounting for over 30% of global GDP, 62% of the world’s population, and 75% of known energy reserves.
• 🚢 The initiative’s ‘road’ refers to maritime shipping lanes connecting China to Southeast Asia, Africa, and Europe, while the ‘belt’ consists of overland routes through Central Asia to Europe.
• 🚆 Major infrastructure projects, like the $3.2 billion railway linking Kenya’s Mombasa and Nairobi, showcase the BRI’s impact on transportation efficiency and development.
• 🌐 Despite extensive investments, some Belt and Road projects, such as a $200 million airport in Sri Lanka, have been criticized for underperforming, with some dubbed the ‘world’s emptiest airport.’
• 💸 The Belt and Road Initiative has led to massive Chinese investments globally, but the full scale and coordination of the plan remain unclear, with funding estimates ranging between $1 trillion and $8 trillion.
• 🏗️ Chinese state-owned enterprises play a significant role in executing BRI projects, with the initiative consisting of several economic corridors like the China-Pakistan Economic Corridor (CPEC).
• 🇵🇰 The China-Pakistan Economic Corridor (CPEC), which connects China’s Xinjiang region to Pakistan’s Gwadar port, has raised concerns over Pakistan’s increasing debt to China, with some estimating investments as high as $60 billion.
• 💥 Critics have raised concerns about ‘debt trap diplomacy’ under the BRI, where countries like Pakistan, Sri Lanka, and the Maldives face growing debts to China that threaten their economic stability and sovereignty.
• ⚔️ While China denies any military intent behind the BRI, its growing presence in strategic locations like Sri Lanka’s Hambantota port and military collaborations with Pakistan have sparked fears of geopolitical motivations.

Q & A

What is the Belt and Road Initiative (BRI) and when was it introduced?

The Belt and Road Initiative (BRI) is a global infrastructure development and investment plan introduced by Chinese President Xi Jinping in 2013. Its goal is to enhance trade, infrastructure, and investment links between China and approximately 65 other countries.

What are the main geographical components of the BRI?

The BRI includes two main components: the 'Belt', which refers to overland routes connecting China to Europe via Central Asia, and the 'Road', which refers to maritime shipping lanes that stretch from China through Southeast Asia, Africa, and Europe.

What are some of the most visible aspects of the BRI so far?

The most visible aspects of the BRI have been large-scale infrastructure projects, such as the $3.2 billion railway connecting Mombasa and Nairobi in Kenya, as well as investments in ports, airports, and roads across various participating countries.

How many countries are involved in the BRI, and what percentage of the world’s population and GDP do they represent?

The number of countries involved in the BRI is estimated to be between 60 and 115. These countries collectively account for over 30% of global GDP, 62% of the world’s population, and 75% of known energy reserves.

What has been the impact of the BRI on Kenya’s transportation system?

In Kenya, China’s investment in the BRI led to the construction of a $3.2 billion railway connecting the port city of Mombasa to Nairobi. The new railway reduces travel time by about two-thirds, cutting the journey from several hours to just four and a half hours.

What is the 'debt trap diplomacy' in the context of the BRI?

Debt trap diplomacy refers to concerns that China’s loans to participating countries under the BRI could lead to unsustainable debt levels. Countries may struggle to repay these debts, leading to potential economic and political risks, including loss of strategic assets or control over key infrastructure.

What examples are given in the script of countries facing issues with BRI loans?

Examples include Sri Lanka, which lost control of the Hambantota port after failing to repay Chinese loans, and the Maldives, which is renegotiating its debt after receiving Chinese funding for a bridge. Pakistan is also facing challenges with its BRI-related debts.

What is the significance of the China-Pakistan Economic Corridor (CPEC)?

The China-Pakistan Economic Corridor (CPEC) is a major component of the BRI, linking China’s Xinjiang region to Pakistan’s Gwadar port. This corridor is strategically important for China’s energy trade, as it provides a direct route to energy suppliers in Africa and the Middle East, bypassing longer sea routes.

What are the concerns regarding the geopolitical implications of the BRI?

Some experts are concerned that the BRI is not purely an economic initiative, but may have geopolitical and military motives as well. The strategic control of key infrastructure, such as ports, raises concerns that China could use these investments to expand its military presence or influence in certain regions.

What have been some of the challenges in the execution of BRI projects?

The execution of BRI projects has faced several challenges, including political shifts in participating countries, such as Malaysia’s new government canceling a $20 billion rail project, and debt defaults in countries like Sri Lanka and Pakistan. These issues raise questions about the sustainability of the initiative.