Why China's Belt and Road Initiative Isn't Black and White | Red Arrow Logistics Transportation and Freight Forwarding

Why China’s Belt and Road Initiative Isn’t Black and White

In 2013, when China announced the Belt and Road Initiative, a massive program of international infrastructure projects, Western critics reacted with suspicion as to China’s motives and skepticism that Beijing could realize its dreams of connecting its mainland to far-flung corners of Africa and Asia. Recently, several countries targeted for development have begun to express misgivings about accepting Chinese investment, and this month, Malaysia made headlines by halting two major projects over concerns about increasing the country’s debt burden. To some critics, this development was hailed as a victory of sorts, and evidence that the world is wise to be wary of China’s intentions. Yet the truth of the Belt and Road Initiative (BRI) is more complex than a showdown between China and the West, and no one should cheer for either its failure or its success without considering its potential benefits and pitfalls.

From the outset, BRI has been a program of such monumental scope that it couldn’t help but be a mixed bag of triumphs and fiascos. (For a more in-depth primer on the program, read our earlier blog.) China’s stated intention was to pump over $1 trillion into roads, railways, ports, and electric plants, and even if some of those projects never offered a financial return on investment, they were designed partially to improve China’s reputation and engender gratitude among other nations. But some of those nations have found their new infrastructure to be a burden, rather than a gift.

In Sri Lanka, BRI built a new airport designed to handle one million passengers, but which often operates on a single flight per day, and according to the Washington Post, Sri Lanka spends up to 80 percent of its government revenue paying down debt. Stories like this are giving other nations pause, including Myanmar, which is scaling back a deep water port, and Pakistan, which is reassessing its BRI commitments. Malaysian Prime Minister Mahathir Mohamad succinctly voiced the shared concern among these nations, saying: “We do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries.”

Many Western economists see the potential of BRI to create “debt traps,” forcing beholden nations to give priority use of their infrastructure to China or bow to its will in United Nations votes. Others complain that the closed-bidding process feeds corruption, leads to exorbitantly expensive price tags, and employs Chinese firms and laborers. A World Bank report on the issue lists “potential environmental, social, and corruption risks,” and suggests that projects will only be effective if undertaken with “complementary…trade, investment and procurement reforms, and social, environmental and governance safeguards.”

Of course, one need not think of China’s intentions as actively predatory to perceive that BRI is primarily designed to benefit China itself, by internationalizing its companies, creating new strategic outposts, and helping to shape emerging economies according to its national interests. However, the fact that China stands to reap rewards from BRI should not, in and of itself, be considered a betrayal of the program’s values. If the United States were to take on similar international infrastructure projects, the first question would (justifiably) be: how does it benefit us? Indeed, many Western criticisms of BRI seem somewhat hypocritical when compared with the behavior of the World Bank and other entities which have frequently exacerbated the political and economic woes of developing economies through debt-plagued and foolish projects.

Double standards aside, the most foolish kind of opposition to BRI is the one that conceives of it as a zero-sum game in which Chinese success equates to American loss, when anyone involved in international supply chains knows that the calculus is not so simple. At present it takes 30 days to ship goods from Asia to Central Europe, but new rail lines stand to cut that time in half. According to the World Bank, “each day’s delay in getting an item from the factory gate to the consumer is estimated to reduce trade by one percent,” so faster market access could be pivotal in opening up BRI countries’ economies to the world, as both producers and consumers.

In a recent Washington Post op-ed, a group of professors and data scientists made the case that Chinese infrastructure projects generally reduce inequality in the regions where they are implemented, which can help stave off political extremism, humanitarian crises, and a host of other issues that the West spends billions of dollars addressing each year. They drive home the need for nuance in understanding this issue, stating that: “The conventional wisdom among Western pundits and politicians is that Beijing is a reckless, self-serving or sinister actor creating problems that others eventually will have to fix. But our findings suggest that, in at least one important respect, the opposite is true: By narrowing spatial inequalities within countries, Beijing’s investments address one of the root causes of instability around the globe and potentially reduce the number of global threats and crises that Western powers need to tackle.”

To be sure, a project of BRI’s scale deserves careful scrutiny lest it cause more problems than it solves. But Western politicians, pundits, and business leaders have for years preached the ability of interconnected and interdependent economies to create a more peaceful and prosperous world, so we must all hope that at least in that sense, the Belt and Road Initiative is a success.