Belt and Road Initiative – cooperation with China

In 2013, President Xi Jinping brought back the traditional Silk Road Spirit of “peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit”. Beijing jointly initiated the Silk Road Economic Belt and the 21st Century Maritime Silk Road, also known as the Belt and Road Initiatives (BRI). Since then, more than 100 countries, including the members of the European Union (EU), signed the Memorandum of Understanding (MoU) with China and begun to develop projects under this framework. However, the results are not as rewarding as expectations.

Since the BRI was launched, vigorous cooperation has been taken place between China and countries all over the world, especially in Asia and Africa. The attempts was to bring along participants with enormous economic benefits through policy coordination, infrastructure establishment, trade and financial activities.

Through the BRI, China has strengthened strategic relations with many governments, who were looking for massive amount of foreign direct investment (FDI) and financial assistance. Six corridors of the BRI, including the New Eurasian Land Bridge, established important transportation connectivity between Asia, Europe and Africa. The participants in the BRI got the possibility to penetrate the Chinese market reach in search for partners and clients. However, in case of several developing countries with high financial and economic problems, the contracts with China appeared to be a double-edged sword, putting them in a deep dependence vis-a-vis Beijing.

As the second world economy and the factory for the whole globe, China is a very powerful country, with a huge influence in Asia and worldwide in both political and economic terms. With its huge amount of resources, it is largely self-sufficient. Its bilateral relations with many of the BRI participants are naturally asymmetric. In order to implement the projects, most of the developing countries fall in the debt trap as China is their creditor. In such circumstances, Beijing becomes net-beneficiary of all the actions under the BRI by taking political and economic control over its debtors. Indeed, China is often accused of being a neo-colonial power, especially among Asian and African countries.

As much as countries in Asia, such as Sri Lanka and Cambodia, welcome BRI projects, there are challenges brought by increasing dependency towards China. For example, in Cambodia, while the two main projects, including the Sihanoukville Special Economic Zone (SSEZ) and the planned Phnom Penh-Sihanoukville Expressway, are estimated to bring benefits to the country’s economy and people’s living quality.[1] Still, projects cannot be brought into place without Chinese investments and assistance through the BRI. Worse still, in Sri Lanka, where people usually use as an example to justify the “dept-trap” thesis, it was the poor experiences of not improving the economic hardship that made people question the intention of China. The most controversial BRI projects in Sri Lanka – Hambantota Port is a clear example of Chinese intervention in domestic infrastructure development.[2] The imbalance of gain and loss pave uncertainties to the future of the BRI.

At the same time, with 52 countries joining the BRI, China was suspected by many western countries for its recolonization over Africa through debt trap. Similar tactics were used to create countries’ dependency over China. For example, in Sudan, there is a construction of a 782 km Port Sudan to Khartoum railway line which China invested US$1.1 billion.[3] Together with other ongoing BRI projects and other non-BRI economic activities, Sudan is at the top of the list of largest borrowers within the North Africa Subregion. Although some may say recolonization is just conspiratorial, the result of development is affected by countries’ instability and weaknesses. No matter which continent is China reaching to, based on major feature of the BRI, countries should still be alert to the level of commitment, as well as the level of intervention from China.

BRI in CEE

Taking into consideration the double nature of the BRI, understood as not only the economic and trade proposal but also as a tool for China to enlarge its sphere of political influence, it is increasingly difficult to judge whether the BRI brought benefits or drawbacks to the participating countries from the Central-Eastern Europe (CEE). The region generally stays alert to the ongoing development of the BRI and is cautious re: the vision shaped by the Chinese government. The participation in the initiative is affected not only by the bilateral relations with China, but also by the EU-China dialogue, the developments within the 16+1 format and by the US government pressure on the European allies.

If one looks on both the terminated and ongoing projects under umbrella of the BRI in the region, there are more problems than profits. For example, Poland – who became an important strategic point of the New Eurasian Land Bridge with the railway connection between the Polish city Łódź and the Chinese city Chengdu – failed in enhancing its economic performance in China. On the contrary, it observes negative trade balance, which shows that the Polish export is 12 times lower than the import from China. Moreover, the operation of railway relies a lot on Chinese financial assistance. All this influences the two countries’ bilateral relations negatively.

Analogous situation happens in other countries of the region. For instance, Hungary who joined the BRI with a hope to be another gateway to Europe – registered little interest from Beijing in investing in the bilateral projects. At the same time, the country lost control and proactiveness in its strategic infrastructure, particularly the Budapest-Belgrade Railway project.[4] As the construction largely relies on loans provided by China, no matter how much Hungary can earn from the construction in the future, it will take years to pay money back to Beijing.

Time for revision

Many experts point out, it is the outbreak of geopolitical tensions between US and China, as well as the Covid-19 pandemic that severely undermine the output of the BRI in Europe. Indeed, it may not be a suitable timing for the initiative in the international arena. However, its intention and objectives were questioned since the very beginning.

The idea of the BRI is fascinating as it revitalizes the ancient Silk Road spirit, which connected the West and the Orient. Also, it is true that the mechanism behind the BRI is refined and meticulous. In practice, the BRI cannot bring “openness and inclusiveness, mutual learning and mutual benefit”, as embedded in the original concept. Instead, it has been accommodating the Chinese interests and the developing countries can’t genuinely gain from it.

The BRI is an enormous and far-reaching vision. It unveiled economic and political ambitions of China. After almost a decade of its implementation, the participants, including the countries of the CEE region, need to re-think their expectations and engagement in the BRI. The EU should strongly promote alternative initiatives in Africa and Asia, which would push Beijing to reflect on the nature of the BRI and to redesign it in order to give to the partners more equal position in the deals.

author: Tera Fung, The Chinese University of Hong Kong

[1] Sok Kha, “The Belt and Road in Cambodia: Successes and Challenges,” The Diplomat, last modified April 30, 2019, https://thediplomat.com/2019/04/the-belt-and-road-in-cambodia-successes-and-challenges/.

[2] Linda C. Li et al., “The Belt and Road Initiative in Sri Lanka: Challenges for Debt-led Development,” China and the World 04, no. 04 (2021): 12, doi:10.1142/s2591729321500188.

[3] Anthony Davis, “China is Building and Funding Africa’s Rail Transport Infrastructure,” Highways Today, last modified December 18, 2016, https://highways.today/2016/12/18/china-building-funding-africas-rail-transport-infrastructure/.

[4] Tamas Matura, “Hungary and China relations,” China’s Relations with Central and Eastern Europe, 2017, 6, doi:10.4324/9781315226644-9.

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