The Next Decade of China’s Belt and Road Initiative: Adapting to Global Shifts in Development, Collaboration, and Security
November 10, 2023, Dr. Thorsten Jelinek, visiting scholar at Hertie School’s Centre for Digital Governance and Europe director at the Taihe Institute
China’s strategic initiatives have manifested as a beacon on the global stage, signalling a comprehensive response to the unpredictable shifts and impending transformations the world faces. For China, today’s transformation might be as profound since the one during the Opium Wars in the 19th century. A decade ago, the Belt and Road Initiative (BRI) was formally announced. While its initial years appeared as „freehand brushwork“ to some, hindsight positions it as a prescient response to a stumbling global economy. This pivot marked China’s departure from a previously Western-imposed convergence.
As the pitfalls of globalization became apparent, especially post the 2008 financial crisis, China introduced BRI as a new development paradigm. This framework sought to echo China’s historic developmental journey while circumventing the pitfalls of liberalist globalization and Western-centric development aid practices. The Western globalization ethos, represented by the 1989 Washington Consensus, championed neoliberal tenets like free markets, privatization, and fiscal discipline. However, this approach subtly hinted at an inevitable alignment under a dominant power, often sidelining the necessity for collaboration and integration. In stark contrast, China’s BRI emphasized both collaboration and economic integration. During the early stages of the Belt and Road Initiative, President Xi Jinping introduced the foundational principle of „consultation, joint construction, and shared benefits“ as the guiding philosophy, which was derived from the broader concept of “community with a shared future for mankind”, underscoring China’s vision for a more inclusive, cooperative, and harmonious international order. China also believed that a country could only become rich when it „builds a road first,“ aligning not only with its own development experience since reform in 1978 but also with that of Korea, Japan, or Singapore. The West similarly followed this approach in the 19th and 20th centuries, constructing modern infrastructure seen as the foundation for economic development, including transportation, energy generation, and telecommunications. Throughout almost the entire 20th century, all sectors were run as state monopolies, with the market being initially perceived as inefficient for the development and operation of large-scale infrastructure. Before the Belt and Road Initiative (BRI), China found the West’s Official Development Assistance ineffective and aimed to add its experience and increase contributions to the World Bank and IMF towards the end of the 2000s. However, China’s legitimate request for co-determination in these institutions faced strong opposition from the U.S. Congress. The U.S. and the old Bretton Woods institutions viewed infrastructure as an investment, believing the market would handle its development, more effectively preventing corruption and misallocation and averting infrastructure from becoming growth bottlenecks. By that time, the World Bank had largely withdrawn from infrastructure aid due to these neoliberal values.
History reinforces China’s previous rationale: only a handful of nations truly converged with Western living standards and liberalist values, while the majority remained distinct. The BRI diverged from the conventional development loan mechanism with its restrictive restructuring conditions. Instead, it focussed on the delivery of strategic infrastructure, identifying it as the bedrock of economic development. Although the BRI has faced unjustified fierce criticism and opposition from the West, many of the infrastructural challenges stem from the inherent complexities of grand projects rather than intentional geopolitical manoeuvring or creating dependencies. There is no doubt: over the last decade, China has embarked on a profound journey of learning, grappling with the nuances of overseas and cross-national planning, financing, and infrastructure execution, all while deepening its engagement with the communities impacted. As was already concluded elsewhere, China’s BRI transitioned from „freehand to fine brushwork“.
BRI has undeniably acted as a forerunner as it has spurred competition. At the First Belt and Road Forum for International Cooperation (BRF) in 2017, many Western delegates oscillated between puzzlement and cautious curiosity about BRI. By the Second BRF in 2019, this initial curiosity had evolved into scepticism, allegations, and doubts about BRI’s longevity. Paradoxically, while the West consistently denounced BRI, it eventually responded with strategic imitation. The BRI’s growing influence prompted the West to develop counter-initiatives. Even as they based their critiques on largely unfounded allegations of geopolitical motivations, debt-trap diplomacy, lack of transparency and sustainability, the West still launched their own development initiatives, inspired by BRI’s approach. These have included the EU’s Global Gateway (2021), the US‘ Build Back Better World (2021), G7’s Partnership for Global Infrastructure and Investment (PGII) in 2022, and the India-Middle East-Europe Economic Corridor (IMEC) presented at the India G20 in 2023. President Biden’s Build Back Better World (B3W) had a brief lifespan before being subsumed by PGII. Notably, Japan was ahead of the curve, launching its Partnership for Quality Infrastructure initiative in 2015. Despite reservations about BRI, it has spurred competition, leading to additional development projects in regions like South America, Africa, and Asia. Such a shift towards market interventionist, infrastructure-led development signifies a complete departure from the Washington Consensus and underscores the previous strategic misstep by the West and its Bretton Woods institutions. Also, mobilising political backing and financing for these Western projects continues to be a primary concern. Time will tell whether the receiving countries continue primarily „getting a lecture about values“ or if the West has become serious in „building roads,“ which determined the nature of the BRI over the past ten years.
On the 10th anniversary of the Belt and Road Initiative this year, its total engagement has exceeded USD 1 trillion across 155 BRI countries, elevating 40 million people out of poverty.
A decade ago, the impending epochal shift in global power dynamics, necessitating vast changes at national, regional, and global levels, was largely unforeseen. Now, it’s clear that the Global South, home to the majority of the world’s population and bolstered by the economic might of the BRICS nations, outpaces the West in GDP. Additionally, the Global South controls most oil reserves and the vital resources crucial for both the green and digital transformation. As the West witnesses its relative decline and the rise of the Global South, the world faces a raft of unparalleled challenges. This underscores the limitations of existing institutions, including the UN, in adapting to and addressing these emerging complexities. Amidst climate change, a stagnant global economy, worsening international security, and the inadequacies of existing multilateral cooperation, China has introduced three new global initiatives as its strategic response manifesting in the Law on Foreign Relations, adopted in June 2023: Global Security Initiative (GSI), Global Development Initiative (GDI), and the Global Civilization Initiative (GCI). These strategic initiatives are not meant to replace but rather to complement and broaden the scope of BRI.
Accordingly, BRI has focused on building economic ties and spur growth via infrastructure projects. Infrastructure has been viewed not and is continued to be viewed as a focal point of cooperation and a driving force for transformation, helping convert latent economic advantages into tangible benefits and assisting BRI countries in charting their dynamic development paths, thereby boosting trade and job opportunities. It is crucial to acknowledge that China sought to leverage its competitive edge in construction, having produced over half of the world’s construction materials, including steel, by 2010. The new BRI is complemented by GDI, which takes a broader approach, adding health, education, and technology cooperation while also emphasizing sustainability and the fulfilment of the Sustainability Development Goals (SDGs). The latter is urgently needed, as only 12% of the SDGs have been realized halfway through their 2030 target. GDI provides the principles and scope necessary to refocus the nature of previous BRI projects. Geographically, BRI initially targeted Silk Road nations. In contrast, GDI aims for global outreach from inception, primarily partnering with developing countries. Strategically, GDI promotes China’s development model and involves technology transfers and training, while the Global Civilization Initiative restates the importance of collaboration, aiming to enhance mutual respect, mutual learning, and harmonious coexistence among civilizations. Finally, the Global Security Initiative (GSI) further complements by fortifying security collaborations, ensuring a holistic and stable framework for China’s global engagements.
China’s Belt and Road Initiative has been undergoing a transition from hardware to software, shifting from capital-intensive to less capital-intensive projects while advancing up the value chain and integrating new technologies. However, the majority of BRI projects, at least in the near and medium term, will continue to center around bankable infrastructure initiatives with traditional financing structures. Recognizing that infrastructure necessitates substantial upfront investments with returns realized over an extended period, China’s State-owned Enterprises (SOEs) have predominantly executed and will persist in delivering BRI projects. Over the past decade, however, these SOEs have evolved from primarily functioning as contractors to assuming roles as operators, investors, and even proprietors of infrastructure developed in BRI countries. The prevalent contractual framework has been the Engineering, Procurement, and Construction (EPC) contracts, typical in the construction industry, supported by funding from China’s policy banks, notably the China Export and Import Bank and Development Bank. While BRI will primarily continue to rely on designing, building, and financing infrastructure, SOEs have embraced a more entrepreneurial and market-driven approach beyond traditional contracting. This evolution is evident as SOEs increasingly acquire equity shares of 5-10% in project companies or even take ownership of entire infrastructure developments. Consequently, China’s BRI has progressed from EPC-based contracts to encompass Build–Operate–Transfer (BOT) and Build Own Operate (BOO) contracts, yet the former remains the predominant form of cooperation.
Despite sharing commonalities with traditional and more advanced infrastructure financing mechanisms, China’s modernization and foreign political strategy, from an underlying values perspective, diverge from Western liberal capitalist principles. Instead, they draw upon a combination of sinicized Marxism and traditional Chinese thought. It is also a response to the fierce economic coercion by the United States and Western foreign policy emphasising decoupling and systemic rivalry. However, the government’s “Chinese-style modernisation” in response to the “New Era” is not merely an attempt to counter the West. Instead, it signals that China is no longer willing to wait for the West to collaborate on equal terms. This sentiment, despite the fragmentation, is increasingly echoed by the nations of the Global South. Through these initiatives, China may once again showcase its pioneering leadership in navigating the challenges of the 21st century. While all three initiatives are set to be implemented concurrently, some sequencing is inevitable due to the complexity of respecting differences between nations – in development, security, and culture – and refining mechanisms that help diminish these disparities over time. In the immediate horizon, China is poised to swiftly implement the Global Development Initiative (GDI), rebalancing from large-scale infrastructure to “small and beautiful” projects that promise rapid, sustainable impact, especially in health, education, and technology. These are naturally aligned with the core principles of the Belt and Road Initiative and are geared towards fulfilling the Sustainable Development Goals. As we transition to the medium term, the emphasis will gradually shift to the Global Security Initiative (GSI), dedicated to bolstering international security by addressing pressing concerns from cyber threats to terrorism and instilling a collective sense of security responsibility. The eventual long-term vision is encapsulated in the Global Civilization Initiative (GCI), which aims to foster inter-civilizational dialogues, mutual learning, and cultural exchanges, building bridges of understanding and respect across diverse cultures and histories. Collectively, these carefully sequenced efforts have the potential not only to complement but significantly elevate the overarching impact of the BRI on a global scale.
About the Author
Dr. Thorsten Jelinek, an expert in public policy and international relations, actively contributed to the discussions on connectivity, digitalization, and sustainability at the First, Second, and Third Belt and Road Forum for International Cooperation. As a visiting scholar at Hertie School’s Centre for Digital Governance and Europe director at the Taihe Institute, he shapes the international policy discourse on digital governance. Earlier, he served as associate director at the World Economic Forum and builds on many years of experience gained in various managerial roles within the industry. Jelinek earned his PhD from the University of Cambridge.