Jonathan E. Hillman
The big numbers being floated for President Xi Jinping’s signature foreign policy effort, the Belt and Road Initiative (BRI), do not add up. Popular estimates for Chinese investment under the BRI range from $1 trillion to $8 trillion, hardly a rounding error. Without a clearer sense of the BRI’s scale, it is difficult to assess its economic and strategic implications. A closer look reveals the highest figures are inflated, scoring political points for Beijing in the short term but also creating unrealistic expectations. Mapping the BRI is part art, part science. It is a moving target, loosely defined and ever expanding. It includes Chinese investment in roads, ports, and other hard infrastructure. It includes trade deals, transportation agreements, and other “soft” infrastructure efforts. If you traveled to China since September 2013, congratulations, you may have participated in the BRI. It includes tourism and other “people-to-people” ties such as education and cultural exchanges.
The BRI is not constrained by geography or even gravity. When announced in 2013, it had two major components: an overland “belt” across the Eurasian supercontinent and a maritime “road” across the Indian ocean and up to Europe via the Suez Canal. Since its announcement in 2013, this vision has stretched into the Arctic, cyberspace, and outer space. Countries have signed onto the BRI in places as far-flung from China as Central America.
But participation in the BRI is less meaningful than it might seem. Roughly 70 countries have joined, but their levels of Chinese investment vary widely. Pakistan has attracted some $60 billion for projects. South Korea signed up, but as of last year, it had no BRI projects. Despite being among the most vocal critics of the BRI, India has still attracted some Chinese investment. An industrial park in Gurajat, for example, would be easily branded as a BRI project elsewhere. In sum, participation in the BRI is not a prerequisite for doing related business with China, nor is participation a guarantee of more business.
There is no firm timeline for the BRI. Some projects and activities that started before the BRI was announced have been rebranded and are often counted along with more recent projects. Until recently, some experts expected the BRI would be phased out when Xi left office in 2022. But having done away with presidential term limits, Xi could stick around for longer, as could his signature foreign policy vision. Theoretically, the BRI could stretch to 2049, the 100th anniversary of the People’s Republic of China and Xi’s target date for establishing China as “fully developed, rich, and powerful.”
Different assumptions for these basic questions—what, where, who, and when—naturally lead to different estimates for the BRI’s size. Stretch any dimension, and the numbers start to rise, especially if looking into the future. But look at what has happened to date, and a more modest picture begins to emerge, including risks that could eventually deflate the BRI’s grand ambitions.
Consider the most common estimate: $1 trillion. This figure is usually tied to promised infrastructure investment. Note the two key qualifiers: infrastructure and promised. Infrastructure, which the CSIS Reconnecting Asia Project tracks, is a major component of the BRI, but as noted earlier, not the entirety of it. There is a natural lag between infrastructure pledges and actual investment, given the complexity of the project planning and construction process. But China, like other countries, also tends to promise more than it delivers.
The best available data suggest that China’s $1 trillion promise has not been met, and at current trends, will not be met for several years. The Reconnecting Asia Project is tracking roughly $90 billion of Chinese funding for transportation projects (specifically, railways, roads, ports, and dry ports) during 2014–2017. Later this year, we’ll add power plants, which along with other energy projects, play a significant part in BRI activities. For example, roughly half of the China-Pakistan Economic Corridor’s investments are energy related.
The American Enterprise Institute (AEI) and Heritage Chinese Global Investment Tracker, which tracks Chinese construction and investment across all sectors, puts the total at roughly $340 billion during 2014–2017. According to AEI’s Cecilia Joy-Perez and Derek Scissors, current trends suggest it would take six to seven years for the BRI to reach the $1 trillion mark. Given limited private-sector participation, they reason that state-driven activities could push the BRI across the $2 trillion threshold in the 2030s.
So how did BRI estimates balloon to $8 trillion? Here’s a theory: they conflate Asia’s massive infrastructure needs with comparatively modest Chinese investments.
Many references to the $8 trillion figure lead back to a 2016 commentary in the Hong Kong Economic Journal, which noted, “The financial experts at the State Council have estimated that ‘One Belt, One Road’ would cost as much as US$8 trillion if it was fully implemented following Xi’s orders.” That State Council estimate has remained elusive. But a similar number was in circulation around the same time. In 2009, the Asian Development Bank (ADB) estimated that developing Asia needed $8 billion of infrastructure investment during 2010–2020.
If there was a State Council estimate, its author may have adopted the ADB’s figure for several reasons. The BRI has only been defined in broad strokes, making reliable estimates difficult if not impossible. And why create a new estimate from scratch, when you could borrow an existing one? Additionally, the BRI has evolved since its announcement. A vision document for maritime cooperation under the BRI was not issued until June 2017. Even the name has changed, having started as the “One Belt, One Road” (OBOR).
Misperceptions about the BRI’s size carry practical implications. For now, Chinese officials can enjoy watching the estimates rise and could even reap some political benefits. They have conjured up a massive carrot that has caught the world’s attention. Some developing countries are “linking” their development plans with the BRI. International companies have assembled teams to source BRI deals. All of these activities reflect a willingness to organize, at least in appearance, around China’s vision.
But China also faces downsides to unrealistic BRI estimates. The BRI’s size excites some observers but worries others. As the effort inflates, so do concerns about its impact on debt levels, the environment, and even regional security. For China, perhaps the biggest risk is unmet expectations. With the world watching, China now faces pressure to deliver on its promises. Even if Chinese officials did not promise trillions of dollars in investment, they have done little to correct these misperceptions.
A little modesty about the BRI’s scale could go a long way. For supporters, it could help reset expectations. For skeptics, it could temper fears about the BRI’s risks. The benefits are obvious, but they require bringing Xi’s grand vision down to earth. That is a price few of his advisers will be eager to pay.
Jonathan Hillman is director of the Reconnecting Asia Project at the Center for Strategic and International Studies in Washington, D.C. Find him on Twitter @HillmanJE.
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