PSIR Simplified

China’s BRI is in news again for various reasons.

First, China and Bangladesh have discussed to revive Bangladesh, Myanmar, China corridor, bypassing India during the recent visit of Bangladesh PM Tarique Rahman to China on 26-29 June, 2026.  This project was originally proposed by China as BCMI  (Bangladesh, China, Myanmar, India Corridor) in 2013, but sensing its strategic implications, India kept out of this project. Now China is reviving it in truncated form under its BRI programme, which has negative strategic implications for India. Also, Pakistan is pursuing to extend China-Pakistan Economic Corridor (CPEC) to Iran to connect to larger region of Eurasia. This project was also launched under the BRI. Earlier Pakistan wanted it to extend to Afghanistan, but in view of deep tensions with Afghanistan, it is now being rerouted to Iran (MR online:2026).

Second, during the recently held G-20 Summit held in New Delhi on 9-10 September, 2023, the India-Middle East- Europe Economic Corridor (IMEC) was launched with much fanfare and touted as alternative to China’s BRI (Belt and Road Initiative). At the sidelines of this summit, the European Union and seven countries, namely India, the US, Saudi Arabia, the United Arab Emirates (UAE), France, Germany, and Italy signed the memorandum of understanding for launching IMEC. The IMEC is touted as a new counter to China’s decade long BRI in Asia and Europe.

Third, amidst the criticism and talk of decline in BRI, China has asserted that BRI has been fruitful to its partners. China recently held the third Belt and Road forum for International Cooperation on 18 October, 2023.  In this meet, the representatives of more than 151 countries, 41 international organizations, and heads of governments from 23 countries including Russian President Putin took part (Yi:2023). During this meeting, Beijing has signaled that the China would continue with BRI in the modified form. The next iteration will be more modest under the banner of ‘small and beautiful’ projects to replace the mega-infrastructure developments that had defined the initiative’s early years. Now the BRI will focus on newer priorities of green development, digital connectivity, and health rather than hard infrastructure. China has announced to invest another $100 billion in the new projects. A notable development from the Indian perspective during this forum was the Afghanistan led Taliban government formally joining BRI project. It means the extension of China-Pakistan Economic Corridor to Afghanistan. China is the first country to appoint ambassador in Kabul after Taliban seized power in Afghanistan in August, 2021. China may eye Afghanistan’s rich mineral resources including lithium and copper. (Cash Joe: 2023) The message is clear that China in not deterred by the US led projects and will continue with the BRI in future also.

What is the Mandate of China’s BRI?

The BRI, launched in 2013 is Xi Jumping’s flagship programme for global connectivity and infrastructure development. The BRI proposes a land-based route and another maritime route from Asia to Europe through the development of highways, ports, and other industrial and energy infrastructures in different countries on the way. These two routes will converge at Venice in Italy, though Italy’s new government has raised objections about the BRI project. In fact with the initial estimated investment of $1 trillion, China has launched a number of projects across different countries in last one decade under the banner of BRI. With this China has emerged as the largest investor in the world during this period (Statista: 2021). Under the BRI, China has a number of connectivity and infrastructure projects in South East Asia, Central Asia, South Asia and Indian Ocean Region as well as East Africa. In Indonesia, China has made investment for the development of fast speed railway infrastructure. In Myanmar, China is developing China-Myanmar Economic Corridor by developing Kyaukpyiu port and linking it with China through land routes All the South Asian Countries except India and Bhutan have joined BRI. China has developed CPEC (China-Pakistan Economic Corridor) which links Kashgar in China’s Xinjiang province with Gwadar port in Indian Ocean located in Baluchistan province of Pakistan. In Sri Lanka, the reach of BRI is more pervasive including development of strategically important Hambantota port and Colombo port city project, among other energy and infrastructure projects. China has taken Hambantota port from Sri Lanka on 99- year lease as Sri Lanka was not able to repay Chinese loans.  In Maldives, China has made deep economic and strategic inroads during Abdulla Yameen regime (2013-2018). China has developed road, bridge and other infrastructure including controlling some small islands on lease. Like Myanmar Port of Kyaukpyiu, the Gwadar port of Pakistan gives another access to China in the Indian Ocean. China has established its first overseas naval base in Djibouti in the Horn of Africa. This will help China in overcoming her Malacca Dilemma in the long run. Similarly, China has made huge investments in Central Asia to develop the land-based silk route.

Why the Need for Alternatives?

China claims that the BRI is a landmark connectivity and development creating win-win situations for both China and the host countries. During the recently held BRI Forum, China claimed a huge success of BRI as Chinese Foreign Minister remarked, ‘the past decade has witnessed historic achievements in Belt and Road cooperation. A path of cooperation, opportunity and prosperity that leads to common development has been found. Benefiting over 150 countries, the BRI has become the most popular international public good and largest international cooperation platform in today’s world’ (Yi: 2023). But many countries including the US and her allies and India do not subscribe to the Chinese projection of the BRI as a positive development intervention. Both the motives as well as the outcome of BRI are contested.

A. China’s Motives are Contested: In spite of China’s benign claims, the BRI is increasingly viewed as a part of her grand strategy of China Dream to emerge as a global power. Chinese President Xi Jinping outlined China’s grand strategy in the form of ‘China Dream’, which was discussed during the18th Party Congress in 2012. The idea of China’s Dream, aims at the considerable technological and economic development of China by the year 2035 and making her a global power by the year 2049, when China completes 100 years of the Communist Revolution. In other words, the China Dreamstands for expansion of China’s strategic and economic influence across the region and the globe. China’s this grant strategy has two components: economic and strategic. First, its political component consists of power projection and expansionism through aggressive posture and Wolf Warrior Diplomacy in the region mainly in LAC and its illegal claims in South China Sea. Under this strategy, China in 2023 has pressurized Bhutan to sign boundary deal to serve its strategic interests against India. Second, China’s grand strategy hasthe economic component, which is implemented through BRI and other economic tools like investment and development partnership with the poor countries of Asia and Africa. Economically, China is willing to expand her influence across the region through trade and investment. For India, the BRI is nothing but a benign version of ‘String of Pearl’ strategy launched by China in late 1990s to encircle India in the Indian Ocean. The US and her western allies view it as a part of her grand strategy to emerge as a global power and push forward an alternative vision of global governance. This is what implies when the West says that China is a ‘systemic challenge’ for them. Thus, because of China’s strategic motives behind the BRI, the countries like India, Japan, and Australia, US and her allies as well as ASEAN members are looking for alternative to China’s BRI. The series of strategic initiatives by these countries to hedge against China’s economic and strategic hegemony reflect their desire to find alternative to China’s BRI. These initiatives are QUAD, Blue Dot Network, Millennium Development Corporation (MCC) programme Build Back Better World (B3W), and now India, Middle East, Europe Economic Corridor (IMEC) launched during G-20 summit in India.

B. BRI Outcomes are also Contested: The decade long implementation of BRI in South-east Asia, Central Asia, South Asia and Africa has also raised some issues which call for finding alternatives. It is alleged that the projects under the BRI have been launched by China with total disregards of global norms. It has also led to debt trap in the partner countries and in some cases even land grabbing to swap the debt burden. Some the harmful features and outcomes of BRI are:

1. China has willfully disregarded various global norms like environmental concerns, labour norms, ignoring local conditions in host countries, and sovereignty and territorial integrity of other nations in executing projects under the BRI. China does not follow environmental norms in implementing these projects.  Environmental concerns have been raised in many projects including the Colombo port city project which is based on reclamation of coastal land. Global norms of labour like terms of engagement are flouted with impunity. In total disregards to the local conditions of host countries, the work is invariably awarded to Chinese Companies and is implemented with Chinese labourers. Thus, there is no employment generation in host countries. China’s BRI has paid no regards to the principle of sovereignty and territorial integrity of other nations. This principle is the backbone of the United Nations System. For example, China’s CPEC projects go through Indian territories in POK in spite of India’s objection to the violation of her territorial integrity. Also, in case of Sri Lanka, China has proposed a new management of Colombo Port City, which disregards Sri Lanka’s sovereign rights in this management. Many political groups in Sri Lanka have protested to this arrangement in 2021.The proposed China-led Economic Commission for the management of Colombo Port City violates Sri Lanka’s labour rights, constitution and sovereignty (Ondaatjie: 2021).

2.  China’s RBI lacks transparency as the terms of loan is not disclosed to the recent countries at the initial stages. Many core issues of such transactions are shrouded in secrecy. No one for sure knows that how much loan is granted at what rate and what is the component of grants in this investment. 

3. The predatory nature of BRI is more visible in rising debt crisis in the recipient countries. China’s debt trap in Sri Lanka is illustrative for other countries. It led to loss of territory by China and huge financial crisis in Sri Lanka in 2022. China’ invested huge amount of money as loan to Sri Lanka in many ambitious infrastructure projects like Hambantota port and Colombo port city projects among others.  Sri Lanka came under China’s debt trap during the middle of last decade. China’s debt composition in Sri Lanka moved from 0.3 percent to her GDP in 2000 to 16 percent of her GDP in 2016. By the end of 2022, China’s debt stock in Sri Lanka had reached some US$7.3 billion, amounting to 19.6 percent of Colombo’s public external debt. These figures include debt recorded in Central Bank and state-owned enterprises (Attanayake: 2023).In 2017 unable to repay China’s debt, Sri Lanka had to hand over her Hambantota port to China on leas for 99 years. Also, Sri Lanka suffered a worst financial crisis in her history in April, 2022, which is mainly attributed to Sri Lanka’s unsustainable debt and imprudent policies. Pakistan is another victim of China’s debt trap and swap for land strategy. China is already Pakistan’s largest creditor, owning approximately 30 percent of its external debt. Pakistan’s commercial banks are borrowing from Chinese banks at 5.5 percent to 6 percent interest, while other lenders offer funds at around 3 percent. Observers feel that China is headed for Sri Lanka like financial crisis in near future (Ghosh: 2023). Meanwhile, Pakistan has also leased her Gwadar port to China for 40 years.

What are the Alternatives?

In view of the underlying strategic motives behind the BRI and its adverse impact on global community mainly recipient countries, other countries including the US and India, Australia and Japan have been looking for alternative to the BRI. Some of these alternatives are discussed below:

Millennium Challenge Corporation (MCC): It is US aid and grant agency created in 2004 by the US congress to help the poor and developing countries. Though created before the inception of BRI, it acts as an alternative to Chinese loans and assistance. MCC provides time-limited grants promoting economic growth, reducing poverty, and strengthening institutions. These investments in core infrastructure and policy and institutional reforms are key interventions that are improving the lives of nearly 270 million people across 46 countries and five continents (MCC: Retrieved 2023). It provides grants to the world’s poorest countries that are committed to just and democratic governance, economic freedom and investing in their populations. In recent years two countries of South Asia Nepal and Sri Lanka have benefitted from MCC grants, though they are still committed to BRI.

Blue Dot Network: The Blue Dot Network is a joint initiative of US, Japan and Australia, which aims to promote quality infrastructure investment that is open and inclusive, transparent, economically viable, financially, environmentally and socially sustainable, and compliant with global standards. It was launched in November, 2019. It awards Blue Dot certificates to proposed infrastructure projects that meet global standards. This certificate facilitates the launch and financial mobilization for the project on the one hand, and exposes mercenary designs of China’s BRI project. The Blue Dot network is not an investment programme, but issues certificates for the viability of the infrastructure investment programmes launched by other countries and institutions.

Build Back Better World (B3W): The B3W is an international infrastructure investment initiative, announced by the G-7 countries in June 2021. It builds upon the Blue Dot Network. The B3W commits $40 billion up to 2035 to meet the infrastructure development needs of the countries. It aims to catalyze funding for quality infrastructure from the private sector and will encourage private-sector investments in infrastructure. It will focus infrastructure investment in four areas: climate, health and health security, digital technology, and gender equity and equality. The B3W will be global in scope, from Latin America and the Caribbean to Africa to the Indo-Pacific. Different G7 partners will have different geographic orientations, but the sum of the initiative will cover low- and middle-income countries across the world (White House: 2021).  It has potential to supplant the outreach of BRI in many developing countries of Asia and Africa, where BRI is well entrenched.

Partnership for Global Infrastructure Investment (PGII): The PGII was also launched by G7 countries during their summit Germany in 2022. It is consolidated version of B3W and is based on the standards of Blue Dot Network. It is a collaborative effort to fund infrastructure development in developing countries. It is projected as a potential alternative to China’s BRI.  Under the proposed plan, the G7 countries and their private business will invest $600 billion in the infrastructure development in developing countries as against China’s $1 trillion investment in BRI projects in last one decade.

India Middle East Europe Economic Corridor (IMEC): The IMEC was launched on 10 September, 2023 during the G-20 Summit in New Delhi by eight countries-India, US, UAE, Saudi Arabia, Germany, Italy, France and European Union. The IMEC is basically a multimodal corridor to link India with Europe through Middle East. It will originate in two branches from India (Mundra and Mumbai) will join at Jaber Ali port in UAE and move further to Al Guwaifat port of UAE at the border of UAE and Saudi Arabia. From Ghulaifat, the IMEC will follow the land route to connect with Riyadh and further west to Haifa port in Israel. After this, it will follow the sea route in Mediterranean to connect to the Piraeus port in Greece (Europe). From Piraeus it will be further extended to link major European countries. It is claimed not only as a potential alternative to the BRI linking China and Europe but also as a revival of old trade route from India to Europe through Arab countries.

          The IMEC is a convergence programme, which is closely linked with previous initiatives like Blue Dot Network and GPII. The IMEC poses a contrast to the BRI, which has been criticized for being socially and environmentally unsustainable, saddling partners with heavy debt, and serving as an amplifier of Chinese influence in the Global South. Alternatively, IMEC promises to deliver green, sustainable, and resilient quality infrastructure. With its digital components, the envisioned hydrogen production and the Blue Dot Network quality certification, IMEC seeks to position itself  not only as an advanced connectivity project, but also a better alternative to China’s BRI (Ruland and Nadalutti: 2023).

QUAD: Though Quad as established in 2017 by four countries US, India, Japan and Australia is primarily a strategic forum to ensues free and open Indo-Pacific in the face of China’s rising assertiveness, it has gradually expanded its mandate to include economic issues in its ambit like connectivity and infrastructure and strengthening  global supply chains. The Joint Statement issued during the last Quad Summit on 20 may 2023 held in Japan focuses on infrastructure development in the Indo-pacific region.  The leaders decided to continue cooperation with Indo-Pacific partners to meet the region’s infrastructure priorities. They will support nations to access to quality, sustainable and climate-resilient infrastructure investments in this region. We aim to ensure the investments we support are fit for purpose, demand driven and responsive to countries’ needs, and do not impose unsustainable debt burdens. We will build on ongoing programs for Indo-Pacific countries including training and capacity-building focused on digital and economic connectivity, clean energy, and climate resilient power sector infrastructure. We continue to strengthen capacity to manage debt issues, including under the G20 Common Framework and promote debt sustainability and transparency. The Quad leaders launched the Indo-Pacific: the ‘Quad Infrastructure Fellowships Program’, which aims to empower more than 1,800 of the region’s infrastructure practitioners to design, build and manage quality infrastructure in their home countries. They said that the Quad is committed to improving the region’s connectivity through the development of resilient infrastructure (PM Australia: 2023).

Conclusion: Are Alternatives Viable to Challenge China’s BRI? The various infrastructure initiatives launched by the US and other countries to present as an alternative to China’s predatory BRI are welcome steps in right direction. But their success hinges on various factors. First, various alternatives are collective decisions which need coordination at various levels, which is not easy to come. On the other hand, China’s BRI is not encumbered by this constraint. Second, the mobilization of public and private funds for the implementation of these projects is not an easy task. China could mobilize $ 1 trillion dollar on its own for the implementation of BRI, hence its impact is visible in many countries. Third, the stringent standards and conditions proposed by the US led alternatives may not be appreciated by the recipient countries. The easy conditions and smooth access of funds was major lure for recipient countries under the BRI. Fourth, these alternatives need suitable strategic conditions for their success which are beyond the control of these countries. For example, the IMEC has faced a new trouble in the form of ongoing Israel-Palestine conflict. If this conflict continues, the IMEC may not be able to seek the desirable cooperation from Israel and Arab world together, which is essential for success of IMEC. Yet, these alternatives have offered a new route to recipient countries to escape the BRI and its predatory elements. It may also have impact on China to reform BRI in coming years.

REFERENCES

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Cash, Joe (2023)  Taliban Says to Formally Join China’s Road and Belt Initiative. Reuters, 19 October, 2023. Available At: https://www.reuters.com/world/asia-pacific/taliban-says-plans-formally-join-chinas-belt-road-initiative-2023-10 19/#:~:text=BEIJING%2C%20Oct%2019%20(Reuters),commerce%20minister%20said%20on%20Thursday.

 Ghosh, Sanchari (2023) With China’s funding, is Pakistan also headed for Sri Lanka-like financial crisis? Live Mint, 28 February, 2023. Available At: https://www.livemint.com/news/world/with-china-s-funding-is-pakistan-also-headed-for-sri-lanka-like-financialcrisis-11677596938532.html

MCC (Retrieved 2023) About MCC. Available At: https://www.mcc.gov/about

Ondaatjie, Anusha (2021) China-Built Port City Plan Challenged in Top Court. Bloomberg, 20 April, 2021. Available At: https://www.bloomberg.com/news/articles/2021-04-20/china-built-port-city-plan-challenged-in-sri-lanka-s-top-court#xj4y7vzkg

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