China is commemorating the tenth anniversary of its Belt and Road Initiative (BRI) with a grand celebration, showcasing the progress and global engagement this ambitious project has achieved. Notable leaders from around the world, including Russian President Vladimir Putin and Hungarian Prime Minister Viktor Orban, have gathered in Beijing to participate in a high-level summit. Even the Taliban government is among the attendees. Chinese media is abuzz with extensive coverage of the BRI’s accomplishments, with a six-part documentary airing on state TV.

President Xi Jinping’s brainchild, the BRI, aims to strengthen China’s global ties through extensive investments and infrastructure projects. By injecting substantial funds into nearly 150 countries, China claims it has transformed the world, and to some extent, it has. However, this colossal gamble has not unfolded precisely as intended, prompting the question: Was it worth it?

The “Win-Win” Economic Success:

Belt and Road Initiative

When the BRI was launched in 2013, drawing comparisons to the ancient Silk Road, it became evident that China had grand ambitions. The “Belt” comprises overland routes connecting China to Europe via Central Asia, South Asia, and Southeast Asia. The “Road” signifies a maritime network linking China to major ports across Asia, Africa, and Europe. It began with substantial state-driven investments in foreign hard infrastructure, primarily in energy and transport projects like power plants and railways.

China promoted the BRI as an economic win-win, assuring other nations that these investments would drive development. Domestically, it was portrayed as a means to support Chinese businesses, bolster the economy, and enhance the country’s reputation. While it achieved some objectives, such as internationalizing the yuan and addressing Chinese overcapacity, the real economic boon came from increased trade. A multitude of agreements expanded China’s access to crucial resources like oil, gas, and minerals, particularly as the BRI extended its focus to encompass Africa, South America, and the Middle East. Over the past decade, trade between China and BRI countries has surpassed $19.1 trillion.

Jacob Gunter, a senior analyst at the Mercator Institute for China Studies, explains, “It’s about Chinese state-owned enterprises going abroad… to help facilitate the flow of resources that China needs,” and it’s also “about expanding and developing export markets as alternatives to the liberal developed world.” This diversification has become vital as China faces escalating tensions with the West and its allies.

Debt Trap Diplomacy:

As the leading lender to numerous low and middle-income countries through the BRI, China has become the world’s largest international creditor. The actual scale of the debt, which amounts to hundreds of billions of dollars, remains obscured, with many loans issued by both public and private lenders shrouded in secrecy. Several countries, from Sri Lanka and the Maldives to Laos and Kenya, are grappling with BRI-related debt, placing the Chinese government in a precarious position.

China has restructured some BRI loans, extended repayment deadlines, and contributed an estimated $240 billion to assist borrowers in meeting their obligations. However, it has been unwilling to cancel the debt. This approach has tarnished China’s reputation, as it has been accused of engaging in “debt trap diplomacy,” luring poorer nations into costly projects that could eventually lead to Beijing seizing collateral assets. Despite the lack of concrete evidence, this accusation has heightened concerns about China’s potential use of the BRI to undermine other countries’ sovereignty.

Challenges and Criticisms:

The Belt and Road Initiative: A Decade of China's Global Engagement

Critics have also raised concerns about “hidden debts” associated with BRI projects. These governments are unaware of the extent of their borrowing institutions’ exposure, making it difficult to evaluate the costs and benefits of the BRI. Over the years, BRI projects have faced accusations of generating wasteful “white elephants,” fostering corruption, exacerbating environmental issues, exploiting workers, and failing to deliver on promises of job creation and prosperity in local communities. Some countries, such as Malaysia and Tanzania, have even canceled BRI deals in response to these issues.

Both Chinese lenders and borrowing countries share responsibility for poor risk management, lack of attention to detail, and coordination failures. However, China’s approach of offering resources with fewer strings attached can be less onerous than offers from global lenders or the West. China’s “one-stop shop” approach, offering quick implementation with minimal paperwork, has been a significant selling point, despite concerns about labor rights violations and environmental impacts.

A Diplomatic Victory:

China has undeniably achieved one of its primary objectives by expanding its global influence. This goes beyond just building railways and highways; China projects soft power, positioning itself as a leader in the Global South through scholarships, cultural exchange programs, and Confucius Institutes. The growth of the Brics trading bloc has also been attributed to China. Surveys have shown that in the past decade, many middle-income countries, including Mexico, Argentina, South Africa, Kenya, and Nigeria, have developed increasingly favorable attitudes toward China.

China’s influence, however, has not come without concerns. Some foreign governments feel pressured to align with Beijing’s agenda or risk losing Chinese investments. China has even been accused of inserting contract clauses that could influence debtors’ domestic and foreign policies. China’s involvement in the UN and BRI participation have swayed several EU members to block or water down policies critical of China.

Embracing “Small and Beautiful”:

Recognizing the need for change, China now emphasizes a “small and beautiful” approach, focusing on low-investment, high-yield projects within the BRI. Initiatives include bamboo and rattan-weaving programs, biogas technology projects, and promoting mushroom-growing technology in various countries. China has also announced a “digital silk road,” emphasizing telecommunications and digital infrastructure, which promises more sustainable returns for Chinese companies.

China has scaled back financing, imposed limits on external lending by Chinese banks, and reduced the size of investment deals by nearly 50% compared to five years ago. Additionally, it has transitioned from being the sole creditor in the BRI to establishing a platform where other countries and international banks can provide loans.

A Global Community of Shared Future:

China envisions a broader role for the BRI, which it now portrays as the foundation of a “global community of shared future.” In white papers released recently, Beijing pledges a more equitable, inclusive, and nonjudgmental form of globalization, in contrast to what it describes as Western powers’ “hegemonic” approach. China claims to be “helping others succeed while seeking its own success,” dismissing accusations of seeking domination. The viewpoint from China is that globalisation is at risk, with the West aiming to “de-China-risk” rather than “de-risk.”

As Beijing’s trillion-dollar experiment continues, it remains a potent tool for wielding influence. Nevertheless, the fundamental question lingers: Does the world desire a Chinese-led world order?