The Belt and Road Initiative (BRI) has helped to deepen China’s relationships with developing countries around the world and has served Beijing’s ambitions in regional economic development, international trade and China’s industrial development. But since the BRI’s launch, Beijing’s ambitions in international trade and industrial policy have evolved, and the BRI – designed explicitly as a flexible endeavour – has been adapted to accommodate Beijing’s changing preferences. Beijing’s changes to the scope of the BRI should not be taken to imply that the BRI has ever been tightly directed; on the contrary, the lack of a discrete institutional identity has been one of the defining characteristics of the initiative and is one of the challenges in analysing the BRI (see ‘Management’ chapter). But, by stepping back, it is possible to observe an evolving pattern of ambitions which Beijing has promoted through the BRI.
At its outset, the BRI was partly designed to address the problem of economic development in Western China. Far from the affluent ports of China’s east coast on the East and South China seas, Western China was (and, to a lesser extent, remains) poorly connected to international trade routes. Moreover, at the time of the BRI’s launch, Beijing was confronting a low-level insurgency in Xinjiang in Western China by the Turkistan Islamic Party terrorist group and saw Xinjiang’s large ethnic-minority Uighur population as a threat to the region’s stability. Before Xinjiang became known for its large-scale detention of Uighurs in so-called re-education camps, China aimed to build stability in the region by boosting economic growth.
To strengthen Western China’s economy, the BRI set out to improve trade and transport connectivity between the region and neighbouring countries to the west and south, and to export markets further afield, by investing in six overland trade routes and a maritime trade route, invoking the ancient Silk Road. These routes through Central Asia, South Asia and Southeast Asia would, moreover, mitigate China’s dependence on shipping through the Strait of Malacca, a maritime choke point between the Malay Peninsula and the Indonesian island of Sumatra, dominated by the United States. Beijing saw its dependence on the strait as a threat to its energy and economic security, because of the potential for the US Navy to block access in the event of a confrontation. In 2018, President Xi Jinping announced the objective of adding another maritime route – through the Arctic.
The BRI quickly expanded to include countries with no direct connection to these corridors – in Africa, Europe, Latin America and Oceania. This expansion served Beijing’s wider industrial policy and addressed China’s overcapacity problem. For projects that served Beijing’s industrial objectives, proximity to the six overland corridors was not relevant to their inclusion in the BRI.
Other industrial objectives were gradually added to the mix. The Chinese government’s ‘13th Five-year Plan’, its programme of government for 2016–20, set out new industrial ambitions. As the overseas incarnation of its industrial policy, the BRI soon reflected these new goals. China’s attention turned first to the digital economy, with Beijing adopting the Digital Silk Road (DSR) strand of the initiative in 2015. Subsequently, Beijing trained its sights on other high-tech and knowledge industries, including green technology and health (including e-health and pharmaceuticals). This widening industrial scope has led the BRI to expand and adapt to accommodate the different market dynamics and commercial actors involved in each sector, and Chinese loans and investments in BRI countries have flowed to these different sectors over time (see charts).
Nevertheless, Beijing has not attached equal importance to all BRI projects. On the one hand, there is, unofficially, a ‘strategic tier’ of projects that are central to Beijing’s core interests and for which the impetus has come from Beijing. On the other hand, there is a ‘soft tier’ of projects that have been driven either by the commercial interests of Chinese firms and the local interests of players in recipient countries, in which case the impetus for the projects has come from outside the Chinese government, or by China’s soft-power concerns, with encouragement from Beijing.
Chinese President Xi Jinping (L) with his Kazakhstan counterpart, Nursultan Nazarbayev (R), while launching the 'Beineu-Bozoy-Shymkent' gas pipeline as they attend the establishment ceremony of the China–Kazakhstan Entrepreneurs Committee in Astana (September 2013). (Photo by Ilyas Omarov/AFP via Getty Images)
At least initially, the strategic-tier projects were concentrated along the BRI’s economic corridors and supported China’s trade connectivity and regional economic imperatives. However, as the BRI has evolved beyond physical-infrastructure projects, the importance of the corridors and the distinction between corridor and non-corridor countries has faded. It has become much more important for Beijing to ensure that foreign governments and overseas markets remain open to China’s leading companies in higher-value sectors of the economy – whether in digital technologies and services, green tech or other advanced industries identified as priorities by Beijing.
Despite these evolving ambitions for the BRI, a key element of Beijing’s overall approach to the initiative has remained constant. Throughout, the BRI strategy has consisted of mobilising Chinese companies and public and private capital in the service of China’s geo-economic interests overseas, thus increasing Beijing’s footprint and influence around the world. By transposing China’s state capitalism to the international arena in this way, the BRI represents a form of mercantilism that no other state can currently replicate. This chapter examines exactly how the BRI strategy has accommodated Beijing’s evolving geo-economic ambitions.
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