China launched its Belt and Road Initiative 10 years ago, it touted huge infrastructure spending linking it with Western Europe, which as recently as 2019, Britain’s then-finance minister said had “tremendous potential to spread prosperity and sustainable development”.
Ten years on, the most senior EU leader expected to attend the third Belt and Road (BRI) Summit this week is Hungary’s populist Viktor Orban, who will join guests including Russia’s Vladimir Putin and a minister of the Afghan Taliban.
Western skepticism of the cornerstone of President Xi Jinping’s ambition to extend China’s global influence stems from China’s failure to assuage concern over its intentions, and whether there is in fact a gap this infrastructure would be filling, compounded by concern over a lack of transparency, analysts say.
Such Western doubts have coincided with Xi’s assertive leadership and a deterioration in ties over trade, human rights, COVID-19 and Taiwan. Italy, the only Group of 7 nation to sign on to the scheme, is now looking for a way out.
“Go back to 2013 – China was absolutely ascendant – Xi Jinping was forecasting a windfall from Chinese firms expanding throughout the world, but a number of serious shocks really affected the reach and breadth of the BRI,” said Matthew Erie of the University of Oxford.
The shocks include a trade war with the United States, Russia’s invasion of Ukraine, and the pandemic, said Erie. Other analysts say economic slowdown both in China and globally, and rising commodity prices, have also cast a pall over the initiative.
Facing such headwinds, Xi is pushing to make the BRI smaller and greener, and to move from big-ticket projects like dams to high-tech ones such as digital finance and e-commerce platforms. The aim is to aid a broader push for a world order that is multipolar and gives the global south more agency, rather than one dominated by Washington and its allies, analysts say.
China has at times bristled at criticism of the BRI, saying it carries anti-Chinese prejudice and a wish to contain its rise, while overlooking what it says are genuine good intentions.
China says more than 130 countries will attend this week, notably from Latin America and Africa, although, unlike in previous years, many more are sending ministers rather than heads of state.
On Monday, a hotel in downtown Beijing hosting delegations from Russia, Kazakhstan and Congo was buzzing with activity, its lobby decorated with displays of BRI goods and guarded by metal detectors at entrances.
More than $90-billion worth of Chinese commercial investment in BRI projects has faced “insurmountable problems”, according to data from the American Enterprise Institute think tank. The issues range from outright cancellation to indefinite delays, “mainly from political requirements and errors by Chinese firms”.
“From the Chinese perspective, the biggest problem is that they’ve realized now that they’re carrying an awful lot of debt in developing countries which are going to struggle to really pay it back,” said Raffaello Pantucci from the S.Rajaratnam School of International Studies in Singapore.
This is one reason the initiative has shrunk and is focused more on quality than quantity, say analysts. But the BRI is also more focused on issues like peace, climate change, energy crises and artificial intelligence, among many other areas, according to a Chinese government white paper released last week.
Ruby Osman, a China expert at the Tony Blair Institute for Global Change, said the summit would give China a chance to showcase some of the global initiatives that Xi has launched over the past two years.
In particular, she pointed to the Global Development Initiative, a $10-billion program started in 2021 to promote “social and economic development”, similar schemes focused on security and “civilization”.
“These sort of mutually reinforcing initiatives are a way for, in Beijing’s eyes, to share Chinese governance ideals, to build consensus on Chinese norms and to start exporting elements of China’s development model,” Osman said.
The change in the BRI focus is apparent in China’s offer of assistance in recent months to Argentina, through doubling the amount it can access through a currency swap line to nearly $10-billion in a boost to its dwindling foreign currency reserves, and enabling it to pay back International Monetary Fund debt and purchase imports.
And last week, Beijing agreed to restructure loans owed by Sri Lanka and Zambia, in what appeared to be its latest demonstration of goodwill towards developing countries.
Wang Huiyao, president of the Center for China and Globalization think tank, said the BRI had “greatly pushed forward global awareness about the infrastructure deficit”.
“It’s not perfect, but it’s a process, and people are gradually realizing it’s so important: we need to build infrastructure. And I think the importance of that is being realized,” Wang said.