China’s Massive Belt and Road Initiative | Council on Foreign Relations

Created Time: October 1, 2021 3:29 PM Database: Evergreen Database Last Edited Time: October 1, 2021 8:21 PM Status: Done Tags:#Article Type: Literature Notes URL: https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative

China’s Investment Trap “String of Pearls”

China targets debt vulnerable countries in the hope they can’t pay their loan back.
- Then countries are forced to give China land, ports, geopolitical important choke points
  - Where China can put military bases, surveillance and maritime control over
- Similar to China’s Rush Into Africa, Explained

Belt and road initiative, or the ‘new silk road’, a collective infrastructure project created by China spanning from East Asia to Europe
What was the Silk Road?
- China’s Han Dynasty used the silk road to forge trade networks on the road
- Central Asia was the center of the first wave of Globalization
China announced the Belt and Road Initiative with two prongs
- the overland Silk Road Economic Belt
- the Maritime Silk Road

It included vast networks of railways, energy pipellines, highways, and streamlined border crossings, 50 special economic zones

What was the purpose?
- to expand international use of Chinese currency
- to break the bottleneck of Asia connectivity
  - Asian countries used to be very isolated

China also invested in ports in developing countries along the Indian Ocean to East Africa and parts of Europe

more than sixty countries—accounting for two-thirds of the world’s population—have signed on to projects or indicated an interest in doing so

Xi Jinping wants to promote a ‘more aggressive China’
It was a retalitation to U.S.’s ‘pivot to Asia’
“China seeks to shape internationla norms and institutions and forcefully assert its pressence on the global stage”
China says it wants to restructure the economy to avoid the so-called middle-income trap

“wages go up and quality of life improves as low-skilled manufacturing rises, but countries struggle to then shift to producing higher-value goods and services”
BRI projects are built using low-interest loans (not donations)
- There are concerns China is targeting countries vulnerable to debt crises
- overall debts to China has soared since 2013
US’s pivot to Asia includes Trans-Pacific Partnership (rejected), the BUILD act, USAID
- But all of these are much less investments than China’s $1 Trillion investment portfolio