The Belt and Road (BRI) has taken a beating, but its central feature of big infrastructure projects will remain recognizable for years to come.
Three forces could change the BRI’s path, but each likely promises more continuity than change. The first and most important is China itself, where powerful interests still want a piece of the BRI action. Of course, as Minxin Pei argues, China is no longer quite as flush with foreign exchange reserves and faces rising costs and shrinking revenues at home. There are already indications of a pullback on BRI-related projects, and it would not be surprising if project announcements are slimmed down in the coming years.
But the BRI’s biggest beneficiaries are not going anywhere. In 2018, seven out of the world’s 10 largest construction contractors were Chinese. Unless these massive state-owned enterprises are ready to pack up and go home, they will continue pursuing new projects that Beijing can place under the BRI banner. Big projects take years to complete and decades to repay. If the BRI was magically paused today, and no more projects were announced, its current footprint would still take years to unfold.
The second is recipient countries, especially developing economies, whose infrastructure needs will remain insatiable. Developing Asia alone needs U.S. $26 trillion of infrastructure investment by 2030. With few alternatives for investment, even countries that have been burned by the BRI still cozy up to Beijing. For example, despite becoming the poster child for accusations of “debt trap diplomacy,” Sri Lanka recently signed a U.S. $1 billion loan with China for a new highway. Malaysia has renegotiated an expensive railway rather than killing it.
Third, China’s competitors are waking up but face coordination challenges. The United States sharpened its competitive toolkit with the BUILD Act but can do more. The European Union announced its “EU-China Connectivity Platform,” and has appointed an ambassador for connectivity, both positive steps. Australia, India, and Japan have been active as well. But until these comparatively modest efforts are brought together and made into something greater than the sum of their parts, particularly for mobilizing private investment, China’s BRI will have plenty of room to operate.
Rather than dying quietly, the BRI is likely to slog along with minor modifications. After all, it is not only Xi Jinping’s signature foreign policy vision, but also enshrined in the Chinese Communist Party constitution. Facing criticism and resource constraints, China will try to bring more partners into its projects to share reputational risks and funding responsibilities.
Nor is China’s interest in large projects likely to end with Xi. The “Go Out” policy preceded the BRI, and someone could fashion yet another tagline to make Chinese power, projected through infrastructure and investment, appear more palatable. Or China could drop the charade and continue building without big slogans. But like the great powers that have come before it, as long as China’s rise continues, it will crave the access and influence that large projects provide.
Jonathan Hillman is a Senior Fellow and Director of the Reconnecting Asia Project at the Center for Strategic and International Studies.
This article was initially published by ChinaFile on April 24, 2019.