The Belt and Road Initiative: What is in it for China?

Abstract

China's outbound investment exceeded inbound investment for the first time in 2015. In years leading up this transition, a maturing demographic transition alongside slowing internal migration and diminishing returns to physical capital investment, all had a role in China's diminished competitiveness in low-wage manufactured exports and the fading of the related growth model. In that context, the 2013 launch of the Belt and Road Initiative (BRI) took place in two stages in two developing countries, Kazakhstan and Indonesia. These launch choices, and the BRI in general are herein elaboratedin terms of economic history, geography, and demography. The BRI in turn is considered to be aiming to foster the ongoing development of China, and in doing so also seeks to instigate new era development opportunity for other developing countries. One facilitation channel for the latter is China's concept of "patient capital," essentially concessional capital, or foreign aid. For China that offers a means via which to internationalise the financial sector and also the Renminbi. Lessons from China's own use of foreign aid and economic development hence serve as an important reference for ongoing scoping of the shape and trajectory of the BRI. To that end, this article sheds light on what is in the BRI for China. ---This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.

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“…As a developmental initiative, many countries cannot cope with the pace of the relationship [4]. This is evidenced by the fact that as a result of many identifiable problems such as; infrastructure, economic constraints, etc., which could hinder the trade flow of the BRI [46].…”

“…We trace the Belt and Road Initiative (BRI) to September and October of 2013, when the President of China proposed a model called "Silk Road Economic Belt" and was aimed to become a regional cooperation model of development and further incorporated a "Maritime Silk Road" as well Swaine [3]. In their view, Huang, Johnston [1,4] noted that the Belt and Road Initiative (BRI) focused on 5 key areas: policy coordination, facilities connectivity, trade facilitation, financial cooperation and bond various people. Thus, breaking away geographical limits and promoting inclusiveness and improve relationships.…”

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“…In 2013, Chinese President Xi Jinping launched the BRI, calling it the 'project of the century' (Clover et al 2017). The BRI broadly emphasizes cooperation in five areas: coordinating development policies; forging infrastructure and facilities networks; strengthening investment and trade relations; enhancing financial cooperation; and deepening social and cultural exchanges (Johnston 2019). It is also argued that the BRI has emerged as the cornerstone of China's economic statecraft.…”

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“…The "One Belt, One Road Initiative": The Centerpiece of the Chinese Economy and Influence 2013 also saw China's launch its "One Belt, One Road Initiative" with two developing countries, Kazakhstan and Indonesia (Johnston, 2018)-the largest global infrastructure project in history. According to Zhou (2018, p. 163), Chinese international expansion can be characterized into three aspects:…”