The Belt and Road initiative in China is referred to within its country as literally “one belt one road” (一帶一路). It gets its name in reference to the overland routes of rail and road transportation (the “belt”), as well as the sea routes of China (known as the Maritime Silk Road). The name also calls an homage to the famous Silk Road of China, which was a crucial factor throughout history in establishing trade between the European nations and China. This strategy was brought forth by President Xi Jinping in 2013 to begin to increase China’s dominance in the global economy.
Xi Jinping’s approach to establishing China’s dominance comes in the form of massive investments in various infrastructures around the world. The Belt and Road Initiative initially focused on infrastructure investment, education, construction materials, and real estate as well as real estate, automobile, railway and highway, iron and steel. There is also currently investing in power grids, with multiple ultra-high-voltage electricity grids planned across China and other regions of Asia.
Currently, Chinese companies have already spent over $340 billion on infrastructure contracts to achieve this global dominance on the economy. However, the World Pensions Council (WPC) has estimated that China’s project could require up to $900 billion USD annually for the next decade.
The reason for this initiative is “a bid to enhance regional connectivity and embrace a brighter future”, and this influence is indeed showing through. The Belt and Road Initiative has taken effect in 68 different countries that make up 65% of the world’s population. As of 2017, 40% of all global gross domestic product has been influenced in some way by the Belt and Road initiative.
The objective of the Silk Road Economic Belt is to link China with the Persian Gulf through Central and Western Asia. It’s also acting as a means to connect China with Southeast Asia, South Asia, as well as the Indian Ocean. Meanwhile, the 21st-century Maritime Silk Road is made to go from China to Europe via the South China Sea. In running through Asia, Europe, and Africa, the infrastructure of the Belt and Road creates a vibrant East Asia economic circle
The influence of the Belt and Road initiative has led to the creation of multiple financial institutions in order to help further the progression of the initiative. One notable financial fund is the Silk Road Fund. Announced in November 2014, Xi Jinping declared this $40 million USD fund to be put into businesses as opposed to loaning for projects. The Silk Road Fund is designated as a separate fund from banks and the CPEC investments.
The initiative’s bid to improve trade lies primarily in its efforts of making physical improvements to the trade infrastructure. These improvements are mostly focused on land corridors equivalent to the historic Silk Road of China, hence the name of the initiative. Although the initiative is currently returning positive results, partnering countries worry about the potential debt burden China may suffer from promoting the initiative.
Another point of criticism for the BRI is its potential contribution to climate change due to investments in coal-fired power stations, such as the Emba Hunutlu power station in Turkey. The promotion of coal-burning increases greenhouse gas emissions, in turn resulting in a greater effect on an already prevalent climate change crisis.
The Belt and Road initiative has a projected completion deadline of 2049, conveniently timed with the 100th anniversary of the PRoC.