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Chinese President Xi Jinping’s “Belt and Road Initiative (BRI),” a global economic and military expansion strategy, will celebrate its 10th anniversary on the 7th of this month. China is on a major promotional campaign, hosting the “Belt and Road Initiative International Cooperation Summit Forum” in Beijing on the 17th of next month as the next phase of expanding the BRI. Over 30 world leaders, including Vladimir Putin, the President of Russia, are expected to participate in this forum.
In 2010, China surpassed Japan to become the world’s second-largest economy, and just three years later, in a surprising move, it declared the BRI, challenging the “Pax Americana.” This declaration came just six months after Xi Jinping assumed the position of President. Over the following decade, the number of countries participating in the BRI increased to 152. According to a report from the Green Finance & Development Center at Shanghai’s Fudan University, China’s cumulative investment in BRI-related projects stands at $962 billion (approximately ￦140 trillion) as of 2022.
Through the BRI, China has expanded its influence in developing countries, particularly in Central Asia and Africa. China has taken the lead in constructing large-scale infrastructure projects in these regions, such as the Karot Hydropower Plant in Pakistan (completed in 2022) and the Hambantota Port in Sri Lanka (the fourth phase of construction is expected to be completed next year), further expanding its presence.
However, there is also a shadow of “China Money” looming over the initiative. Some countries, enticed by Chinese investments, have accepted them as “gifts” but later struggled to handle the high interest rates associated with these investments, leading to financial crises. China applies an interest rate of around 5 percent on the funds it disburses under the BRI, roughly twice the typical rate of the International Monetary Fund (IMF). According to the Center for Global Development (CGD) in the United States, 23 BRI-participating countries have faced bankruptcy crises due to the high-interest debt repayment burden to China.
There are warnings that the next 10 years of the BRI could potentially lead to military expansion. The U.S. think tank, the Foundation for Defense of Democracies (FDD), stated in a report on the 2nd that “China is using astronomical amounts of loans to build infrastructure and, if unable to repay the debt, converting ports into military bases, thus using the BRI as a foundation for military augmentation.”
The BRI is a grand scheme that leverages China’s substantial financial resources to connect Southeast Asia and Central Asia in the west, Africa, and Europe through land-based railways and maritime routes, and extend its influence all the way to Central and South America, which is “under the chin” of the United States. China’s “hegemonic ambitions” have led to a more negative perception of China among Western nations, including the U.S. However, countries that have benefited from BRI tend to have a more favorable view of China. In a survey conducted by Pew Research in July, only 23 percent and 15 percent of respondents in countries that received Chinese funds, such as Kenya and Nigeria, had a negative opinion of China, while in the United States, 83 percent, and South Korea, 77 percent, had a negative opinion.
One reason why the BRI succeeded in carving out a “niche” in developing countries is that it addressed the limitations of “Pax Americana.” After World War II, the massive U.S. military presence in East Asia, although criticized, served as a “shield” protecting countries like South Korea, Japan, and Taiwan from hostile nations such as North Korea and China. This protection allowed for explosive economic growth in these countries. However, some countries, particularly in Central and South America, did not benefit from Pax Americana. During the debt crisis in the 1980s, the United States used institutions like the IMF and the World Bank to enforce neoliberal policies in these regions. Countries like Mexico, Chile, and Argentina experienced extreme polarization, job insecurity, energy shortages, and other side effects during the forced privatization and market liberalization processes, resulting in the weakening of their national capabilities. Seeing these examples, developing countries welcomed Chinese funding through the BRI, citing “non-interference in domestic affairs” as a slogan.
Many African countries with dictatorship and corruption, actively joined the BRI for similar reasons. Among the 55 African countries, 37 of them are participating in the African section of the BRI. China’s first overseas military base was constructed in Djibouti in East Africa in 2017. The New York Times noted that “as of 2021, China’s overseas loans and investments accounted for 60 percent of the IMF’s total,” indicating that “China is challenging the United States’ status as the “lender of last resort” in the international community.”
The past ten years of the BRI have seen a mix of successes and challenges. Some countries, like Saudi Arabia, have benefited without relying solely on direct financial support from China, leveraging technology cooperation and other means to their advantage. Larger countries such as Russia, Kazakhstan, and Brazil have also secured massive infrastructure projects worth over $1 billion from China, positioning themselves as winners of the BRI.
On the other hand, Zambia borrowed $6.6 billion from China’s state-owned banks but faced a national bankruptcy crisis in 2020 when it couldn’t repay. Sri Lanka, unable to meet its debt obligations, was compelled to cede 80 percent of its ownership in the Hambantota Port to China in 2017. Djibouti, which China strategically positioned as a gateway to Africa by citing historical evidence that the Ming Dynasty’s Zheng He reached as far as Eastern Africa, saw its external debt soar from 50 percent of its GDP in 2016, during the initial stages of Chinese capital infusion, to 85 percent just two years later, with 70 percent of the debt owed to China. U.S. President Joe Biden criticized the BRI as a “debt and noose” business in July.
Amid the Belt and Road’s mixed fortunes, China’s leadership plans to use the 10th anniversary to elevate it to the next level. China’s Foreign Minister Wang Yi stated on the 1st of September, “We are prepared to seek high-quality Belt and Road construction from a new starting point.” China’s next goal is to wield the international influence gained through the Belt and Road Initiative to its own interests. They aim to position themselves as advocates for developing countries, amplifying their voices in the international community (U.S. foreign affairs magazine “The Diplomat”), while securing military bases and supply depots in various countries (U.S. think tank FDD) and creating new transportation and supply networks, potentially posing a challenge to the United States.
☞Belt and Road Initiative
It is China’s external expansion policy, first proposed by Chinese President Xi Jinping on September 7, 2013, during a lecture at Kazakhstan’s Nazarbayev University. The concept involves charting a 21st-century version of the Silk Road, a land and sea route connecting regions in China’s west to Southeast Asia, Central Asia, Africa, and Europe. China utilizes its “Chinese money” to build infrastructure in developing countries beyond the reach of the United States, effectively securing military bases and supply points while challenging the U.S.-centric world order.
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