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Ten Years of the BRI: Trends and Challenges by R Madhumitha



Article: 24/2023



The One Belt One Road initiative was announced during Xi Jinping’s first Presidential term as the cornerstone of Chinese foreign policy. Deploying the narrative of the ancient Silk Road, President Xi announced the One Belt One Road policy in two speeches that were delivered during his visits to Kazakhstan and Indonesia in 2013. The year 2023 marks ten years of the BRI. Here the paper introduces some of the major changes that have occurred at the turn of the decade, complemented with relevant infographics. Using several resources, we have prepared a tabulation of the Chinese footprint in the Indian neighborhood and the accompanying companies.


Drivers for the BRI and Nature of Investments

The BRI was a response to several different domestic drivers in China - One, China’s excess industrial capacity that had to be utilized, a more aggressive foreign policy that sought to dominate the region, and the mounting energy pressures that pushed China to look outward to preserve their oil and gas supply. The major components of the BRI investments over the years have been in infrastructure - particularly energy and transport that contributed to about 60% of China’s BRI engagement. 63% of the overseas investments under the BRI constituted fossil fuel related energy investments like oil pipelines. However, green investments like solar energy, hydro-energy and wind energy also witnessed an increase of 50% last year. The BRI consisted of both construction and investment projects. Chinese State Owned Enterprises engaged with construction projects while private companies like Alibaba. Over the years, Chinese construction projects have slowed, due to difficulties in financing and the tight budgets of recipient governments. On the other hand, Investment-based projects that involve the private sector companies like Alibaba and CATL have experienced a major increase.


The following infographic represents the sectoral concentration of China’s BRI projects:



Ambiguous Processes: Procurement, Debt-financing and Dominance of SOEs


Despite the abundance of information on Chinese investments, some aspects of the BRI remain unclear. One is the bidding process, or the procurement process that is involved in the procurement of contracts. It follows that the general public still remains in the dark about whether these processes conform with international norms. In the context of development financing, an unclear bidding process that results in China getting over 60% of its projects has come under question. For instance, the bidding process in the China-Pakistan Economic Corridor was not disclosed by China, which was a project with one of the highest values (Ghossein et al, 2018).


The major companies, both SOEs and Private companies that engaged with construction and investments in the BRI projects are the following -:


In 2022, the companies that figured most prominently in construction projects were PowerChina, China Railway Engineering, and China Energy Engineering. In 2018, Chinese SOEs contracted half the BRI projects by number and by value, they contracted over 70%. The involvement of Chinese SOEs is a two way process - the SOEs are able to wield political influence over the party while the party is also able to guide the policies of the SOEs. Often, personal connections formed between the directors of SOEs and government officials forms an important way that SOEs are able to inform government policies. State-organized BRI forums witness the influence of several SOE managers, and state officials visit SOEs to form BRI policy. https://www.lowyinstitute.org/the-interpreter/china-s-belt-road-initiative-inside-looking-out


Making the process of procurement more transparent would involve the host countries to demand fair competition and transparency on the part of China. If they do not have political clout, BRI countries may have to consider forming some degree of multilateral cooperation to push for the same. For instance, Vietnam and Thailand have also been more assertive in negotiating the process of the BRI engagement, while countries like Indonesia, the Philippines and Malaysia have been more cautious in their engagement with the BRI. Indonesia has been trying to push for Chinese companies to employ more locals and use the most environmentally-friendly technology in the undertaken projects. Malaysia has also been working towards reducing its national debt and has canceled or deferred projects worth 23 billion USD. Nepal has been pushing for China to engage with the BRI only in terms of grants and not loans. While this is unrelated to the actual bidding project, it is a good example of a smaller host country attempt to gain more agency in the terms of engagement with the BRI and avoid what has commonly come to be known as “the debt trap” wherein host countries are unable to repay the debts to China after completion of several projects. Although China is waiving loans in a more ad-hoc manner, it has refused to join the Paris Club, which addresses indebtedness among lower-income nations, casting suspicion and concerns over its strategy with debts. To read more on China’s debt trap diplomacy.


In relation to this, 14 countries witnessed a drop in engagement with the BRI by 100% in the last year. To name a few, Angola, Nepal, Peru, Russia, and Sri Lanka. Some common challenges that surface, particularly in population rich south-east Asian apart from debt and lack of transparency is the lack of local workers being hired by Chinese companies for various projects. Often this has resulted in intense domestic resistance which exacerbates the cancellation and delay in the projects. Land acquisitions in the BRI projects also pose a major threat, often coming with forced evictions and police brutality. An example of this is Cambodia, wherein the Chinese company Tianjin Union Development Group owns an industrial park at 100% equity stake. However, the ownership was transferred to Cambodia due to a limit in the domestic law on foreign land concessions; experts argue that it could result in the creation of a proxy Chinese city (ICWA, 2022).


Persistence of Strategic Investments

Although there has been a decline in construction projects over time, smaller projects that do have benefits for host countries have been undertaken even in times of economic distress. However, post-pandemic, we may see a continual thrust to two kinds of projects - strategic engagements with nations that lead to strategically placed transport infrastructure, and resource-based engagement focussed on oil, natural gas, and minerals. Major financiers of projects in Southeast Asia were: China Development Bank, China Exim Bank, Agricultural Development Bank, Industrial and Commercial Bank.


At this juncture, not being a signatory to the BRI projects, keeping abreast with Chinese investments is key to Indian economic and strategic interests. The following is a compilation of major BRI projects in Indian neighboring regions, with the presence of major companies in each country tracked. Several major projects are tracked here, and this is a work in progress to support and guide our future research on the BRI and frame questions.


Click here to read the major projects of China under BRI in India's Neighbourhood:

TEN YEARS OF BRI - A VIEW OF INDIAN NEIGHBOURS - Major Projects (2)
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Major Chinese SOEs involvement in the Indian Neighbourhood
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(Ms. R Madhumitha is a research officer at C3S. The views expressed in this review are those of the author and does not reflect the views of C3S.)


Read More


Bhattacharjee, Dhrubajyoti. “ China-Pakistan Economic Corridor: Pursuing Agenda Amidst Conflict Resolution”. Indian Council for World Affairs, 2022.


Singh, Teshu. “China and Bangladesh under the rubric of the BRI ”Indian Council for World Affairs, 2022.


Mallempati, Samantha. “BRI in Sri Lanka and Maldives: Economic, Political and Security Dynamics”. Indian Council for World Affairs, 2022.


Kumar Naresh. “China’s BRI in Nepal: Complexities and Concerns”. Indian Council for World Affairs, 2022.


Ghosh, Anwesha. “ China, Afghanistan and BRI”. Indian Council for World Affairs, 2022.


Rolland, Nadège, Filippo Boni, Meia Nouwens, Nilanthi Samaranayake, G. Khurana, and Arzan Tarapore. "Where the Belt meets the Road: security in a contested South Asia." asia policy 14, no. 2 (2019): 1-41.









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