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Five myths about China’s Belt and Road Initiative

No, it’s not driven by military motives. And it’s not the second coming of the Silk Road.

Vehicles stand in a parking lot as a large screen shows an image of Chinese President Xi Jinping in Kashgar, Xinjiang autonomous region, China, on Thursday, Nov. 8, 2018. Although it represents just 1.5 percent of China's population and 1.3 percent of its economy, Xinjiang sits at the geographic heart of Xi's signature Belt and Road Initiative. (Bloomberg/Bloomberg)

By Jonathan Hillman

Jonathan Hillman is the director of the Reconnecting Asia Project at the Center for Strategic and International Studies.

May 31 at 6:00 AM

Chinese President Xi Jinping’s vision for putting Beijing at the center of global economic affairs is about forging new connections of all kinds, from building infrastructure to strengthening cultural ties. The Belt and Road Initiative (BRI) offers lofty promises of “win-win” investments that have persuaded some 126 countries to sign on. But critics caution that the project, which began in 2013, stokes corruption, harms the environment, creates financial dependencies and extends Chinese military power. The BRI is ambiguous by design, which has birthed several myths. 


China is spending trillions.

“China’s $8 trillion construction programme ‘riskiest environmental project in history,’” warned a British headline last year. The New York Times has called it “China’s $1 Trillion Plan to Shake Up the Economic Order.”

Exact figures are elusive, because the BRI is loosely defined, ever-expanding and open-ended. Many estimates reflect China’s promises for infrastructure investment, only a fraction of which has been delivered so far. According to data from the American Enterprise Institute, China had spent roughly $400 billion as of mid-2018. The highest estimates tend to count all trade and investment between China and partner countries, mistakenly attributing it all to the BRI, or they conflate the BRI’s size with the world’s needs for infrastructure. 

Compared with those needs, the BRI doesn’t look so big. Asia alone requires $26 trillion for infrastructure by 2030 to maintain growth and adapt to climate change, according to the Asian Development Bank. That provides an opportunity for countries, including the  United States , to shape and benefit from the world’s infrastructure boom. Officials in Beijing have allowed BRI estimates to balloon for political gains , but Chinese lending has been decliningand faces head winds. The country’s foreign reserves have  dropped since the BRI was announced, meaning it has less money to dole out but more partners to please — potentially a recipe for disappointment.


Military motives drive the BRI.

China’s “ efforts to build ports around the world aren’t because they want to be good shipbuilders and stewards of waterways, but rather they have a state national security element to each and every one of them,” Secretary of State Mike Pompeo has warned . “It is a concerted, strategic endeavor by China to gain a foothold and displace the United States and our allies and partners in the Indo-Pacific region,”the head of U.S. Pacific Command   saidlast year.

To be sure, most infrastructure can serve both commercial and military purposes. Some BRI projects, like portsin Pakistan and elsewhere, could eventually benefit China’s military or encourage its expansion. But to date, the BRI is mostly an economic and political program with military implications, rather than the other way around. 

Ultimately, China’s desire to find new markets for its bloated state-owned enterprises is a stronger motivating force than the quest for military power. China is home to seven of the world’s 10 largest construction companies and used more cementbetween 2011 and 2013 than the United States did during the entire 20th century. The overriding incentive for Chinese state-owned enterprises is simply to build. They get paid regardless of whether projects are economically viable or serve Chinese foreign policy objectives. 


Chinese projects are cheap.

China’s partners often claim they have struck great deals. “The Chinese Government and China’s export import bank will offer better conditions than any development bank loan available in Europe,” Hungary’s minister of foreign affairs and trade   explained in 2016. “Our banks don’t offer these kinds of interest rates,” the head of Malaysia’s Finance Ministry   said in 2017.  

But the BRI is a middleman’s dream, offering up big projects with little oversight, and China’s opaque lending practices increase the risk of cost inflation and corruption. After reportsof missing funds, including some related to Chinese projects, that same former Malaysian finance minister faces jail time, as does Malaysia’s former prime minister, Najib Razak. In Myanmar, the cost of a port for which Beijing was originally planning to charge $7.3 billion was slashed to $1.3 billion after U.S. officials sent technical experts to help review the deal. Without adequate oversight, officials fill their pockets, and citizens foot the bill.

When China’s offer is the only one on the table — which it often is in risky business environments — Beijing naturally presses for its own interests. Most Chinese  lending is on commercial terms , with higher interest rates than standard foreign aid. Chinese firms overwhelmingly get the  contracts , and deals can include other one-sided provisions . In Montenegro, a  highway deal worth 20 percent of the country’s gross domestic product requires that any disputes be settled in Beijing courts and allows China to take land as collateral. It’s not a terrific bargain for Monte­negro.


Belt and Road is centrally run.

BRI maps depict a world in which all roads lead to Beijing. The project sounds like it’s centrally run in government white papers and speeches by Xi, who has called for the creation of six “economic corridors” that stretch across the supercontinent of Eurasia. “China’s government has taken other actions to centralize [BRI] within its foreign policy,” explains a U.S. Defense Department report, pointing to those corridors as well as Chinese policy planning and aid coordination groups. 

But the reality is messy on the ground, where interest groups within and outside China are shaping activities to suit their own agendas. Xi’s six corridors remain mostly aspirational; there is little evidence that more projects are happening within them than outside them. With projects in the Arcticcyberspace and outer space, managing everything may be impossible. No wonder the BRI brand has been appropriated for fashion showsmarathonsdentistry and other unrelated activities. With generous subsidies up for grabs, China’s provincial governments have rushed to announce new China-Europe railway services, undercutting one another on pricing and sowing confusion. The result is a set of activities that is often more chaotic than strategic.


The Silk Road is returning.

The BRI was initially divided into two components, the Silk Road Economic Belt and the 21st Century Maritime Silk Road, names that evoke the travels of explorers like Marco Polo and Ibn Battuta. In the years since, advocates of the project have embraced this romanticized marketing device. “I hope President Xi’s visit will further strengthen the ties between Italy and China: two countries that, since Marco Polo’s time, have a long-lasting friendly commercial relationship, built and developed along the Silk Road,” a senior Italian official wrote this spring when defending Italy’s recent decision to join the BRI. When a train from China arrived in London in 2017, on the first direct freight route between the two countries, the Telegraph declared it “a new chapter in the history of the centuries-old trading route.” 

Overland trade is not making an epochal comeback, since 90 percent of the world’s goods travel by sea, but great-power competition is. A better comparison is the struggle among colonial powers that lasted from the mid-19th century to World War I. Many of the BRI’s key technologies — deep-water ports, high-speed railways and fiber optic cables — are descendants of technology that Western powers leveraged during this period to expand their access to foreign markets. Britain, Germany and the United States pursued major infrastructure plans at great costs. In some places, China is literally replacing and retracing colonial projects, building railways in Africa and laying data cables under the sea. 

Five myths is a weekly feature challenging everything you think you know. You can check out previous myths, read more from Outlook or follow our updates on Facebookand Twitter


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