World leader attendance at the Belt and Road Initiative’s (BRI) third international forum is down over 30 percent on its second forum in 2019. As China’s trillion-dollar global infrastructure binge celebrates its tenth birthday with Putin and the Taliban, can the BRI survive another ten years?
In the manner typical of PR and propaganda alike, the white paper passed out for attendees to discuss over their luxurious meals at 2023’s Belt and Road Forum for International Cooperation in Beijing (held on October 17 and 18) was breathless. According to the blurb, the Belt and Road entwines with the Silk Road of centuries past to enrich “the ancient spirit with the zeitgeist and culture of the new era, and provides a platform for building a global community of shared future.” Eliciting presumably quizzical looks from the likes of Sri Lanka and Suriname, it also claims, “No participating country has fallen into a debt crisis as a result of BRI cooperation.”
Speaking at the forum, China President Xi Jinping tried to hit that harmony vibe by quaintly rebranding the next ten years of his global cement, steal and tarmac frenzy as “cooperation in green infrastructure, energy and transportation,” as well as promising new, inclusive leadership on AI, investment in services and expanded market access for digital products. However, he also digressed somewhat to rally against “unilateral sanctions, economic coercion, decoupling and supply chain disruption” in a swipe against the mostly absent West.
The outburst opens a window into the Belt and Road’s geopolitical soul: Chinese Communist Party (CCP) ambition is not leading to a more cohesive world, but a more divided one. Infrastructure fusion is driving lopsided competition. This in turn is tipping the balance of trade with many countries massively to Beijing’s favor, presenting it economic weapons and creating security risks, all of which threatens to worsen due to the quiet data-scavenging of trade and other intelligence at ports and hubs across the world. The result is not always mutual love between nations.
Potentially, the Belt and Road is also perpetuating a broken economic model. Recent months have highlighted how, far from astonishing, China’s economic rise has in fact been powered by vast over-borrowing by local governments to construct an alarming array of pointless transport and other infrastructure. Unless such projects can deliver taxable economic activity or direct return on investment to outweigh interest rates and cover running costs, they are white elephants threatening the collapse of financial institutions. And that is without factoring in environmental damage.
The pattern is being mirrored around the world. Several Belt and Road developments no doubt do justify their investment in monetary terms, and even create new pathways to financial agency for their recipients, but there are numerous counter-examples of bribery, corruption and cost-inflating contracts signed to serve the interests of Chinese companies after opaque selection procedures.
The fruits are often underwhelming or lip-pursingly expensive: a road to nowhere in Montenegro; an abruptly terminating railway in Kenya; a misrouted $500-million highway in Macedonia; a crack-riddled and perhaps devastatingly erosive dam in Ecuador; stumbling port developments subverting the local fishing industry in Gwadar, Pakistan, etcetera.
In some cases, unfinished work is a prelude to inviting private sector Chinese firms to complete the projects in exchange for taking guaranteed revenues afterwards. Elsewhere, especially in Southeast Asia, the Belt and Road has a porous boundary with gang-run enclaves and shady entities that boast connection to China’s state-owned companies. Then, there are the displacements of people from their homelands, the threats to UNESCO World Heritage sites, the huge carbon footprint, the brand hijacks by apparent grifters, the allegations of forced labor and the extinction threat to rare animals like orangutans.
These kinds of costs do not feature in the nearly $400 billion of repayments coming due for countries around the world, much of which was obscured from their public balance sheets. The payback bills also do not capture how a significant portion of the employment openings that Belt and Road projects support is often filled by Chinese nationals or how infrastructure alone cannot power countries forward if, for other reasons, they lack China’s production or maintenance capacity.
Under the circumstances, therefore, it is no surprise that Xi was keen to platform cooperation, emphasize Earth-sensitive infrastructure and lambast decoupling on the Belt and Road’s tenth anniversary. While China’s current preeminence in the production of green tech makes the export of energy capacity an obvious, popular and image-friendly economic opportunity for the country, the establishment of rival supply architecture, such as proposed by the U.S. and Europe, threatens that dominance.
Disengagements from the Belt and Road also jeopardize Beijing’s military repurposing options, its data capture strategy, its mechanism for dealing with workers who have run out of things to construct at home in China, its forcible repatriation of Uyghurs, the gift-and-contract conveyor belt for its companies and the convenient little influence levers it has gained overseas, for example, to isolate Taiwan or to obstruct the work of journalists investigating the antics of its fishing militia.
In Mandarin, the global masterplan is known as One Belt, One Road (一帶一路), after all. Alternatives are not foreseen, but holding a worldwide network together is certainly not easy with shaky banks at home, a decidedly mixed reputation abroad, broken past promises and finance for foreign development that has, by one measure, crumpled to $5 billion in 2021 from a peak at $90 billion in 2016.
Hence, Xi exhorts against sanctions and economic coercion, a come-hither cry to those in the audience who might engage in the odd genocide, kleptocratic embezzlement or crime against humanity and therefore find themselves uncomfortably excluded from other financing options. Promises of digital exchange, which will likely contain elements of repression tech and perhaps even parallel subsea internet cables, will be popular in similar quarters as well.
More crucially, China has also promised to reanimate the Belt and Road with another $100 billion in loans via the Export-Import Bank and Bank of China. Where exactly this never-ending stream of money will come from as China’s economy suffers intrinsic weaknesses and Beijing continues to fork out hundreds of billions of dollars in international bailouts for the loans it has already issued is a matter for economists to ponder. One presumes it will be disbursed cautiously, and not everybody will see their wish list fulfilled.
Nonetheless, Xi will be heartened that among the leaders who still attend the Belt and Road forum are those from countries rich in resources needed for a 21st-century economy such as Argentina, Chile, Democratic Republic of Congo, Indonesia and Mongolia. They offer him hope for a continued stranglehold over the world’s green transition and therein ongoing international meekness over his dictatorial rule. He will also take comfort that 140 delegations were present at the Belt and Road’s tenth birthday party, including one from France, even if they were not all accompanied by heads of state.
Less happy will he be, however, to reflect on Africa’s increasing confidence in its own power, which may not always take China’s side, or the public observations of Indonesian President Joko Widodo, who has just seen costs on a new high-speed railway overrun by $3 billion dollars, taking his state’s overall debt to China past $20 billion. He asserted that the Belt and Road must not “complicate the fiscal conditions of the countries involved” and requires a collective effort to maintain its values.
Despite his forum’s tagline, “High-quality Belt and Road Cooperation: Together for Common Development and Prosperity,” Xi prefers a one-man show. Unless his loans and projects can resolve their many difficulties, that is exactly what it may slowly become.