China’s Belt and Road Initiative Faces Setbacks as Global Perception Shifts

China’s ambitious Belt and Road Initiative (BRI), designed to create trade and investment links with developing nations, is showing signs of losing appeal and facing increased criticism. The $1 trillion global infrastructure investment program, launched a decade ago, has encountered challenges ranging from hidden military ambitions to corruption and lack of economic results.

Background

The Belt and Road Initiative, initially presented as an economic development program, began in 2013 with the goal of building trade routes and facilitating commerce. Over the years, it has evolved into a multifaceted initiative encompassing global artificial intelligence governance, development projects, security, and more.

The Unraveling

Italy’s Withdrawal:
Blow to Expansion: Italy’s formal exit from the BRI in December 2023 dealt a blow to China’s aspirations of expanding the initiative beyond low- and middle-income nations. Italy is the only G7 country that joined the BRI.
Trade Imbalances: Italy cited a lack of tangible results and a doubling of its trade deficit between 2019 and 2022 as reasons for leaving. This move could trigger a “snowball effect” with other countries, particularly in southern and eastern Europe, reconsidering their involvement.

Hidden Military Ambitions:
Strategic Focus: Experts argue that the BRI’s commercial component was never the primary focus. Instead, it served as a cover for advancing China’s global military ambitions. The program’s infrastructure investments have hidden Beijing’s increasing military footprint in foreign ports with dual civilian and military use.

Forced Labor, Corruption, and Debt Traps:
Exported Issues: BRI projects have been linked to forced labor, with millions of Chinese workers reportedly toiling under harsh conditions worldwide. Corruption has also played a role, with deal terms involving personal favors inflating project valuations. The concept of “debt trap diplomacy” gained traction, with countries like Sri Lanka facing economic challenges and ceding control of critical infrastructure.

Shrinking Wallet and Changing Geopolitics:
Declining Investments: China’s BRI investments peaked at about $75 billion in 2017 but steadily declined, reaching approximately $48 billion in 2020. Economic challenges, including a deflating property sector and local government debt, have limited China’s financial capacity.
Geopolitical Shift: Countries are becoming more wary of China’s intentions. Italy’s withdrawal coincided with the European Union adopting a more cautious stance towards China. The geopolitical landscape has changed, with growing skepticism about the BRI’s benefits.

Future Prospects

Rebranding Efforts:

Strategic Pivot: The CCP celebrated the BRI’s 10th anniversary with the third Belt and Road Forum, where it announced a pivot towards “small and beautiful” projects. The initiative is shifting focus towards artificial intelligence and green energy.
Changing Geopolitics: Countries, including the United States, are reevaluating their strategies. The U.S. has initiated the Partnership for Global Infrastructure and Investment (PGI) with G7 partners, emphasizing infrastructure financing for low- and middle-income countries as an alternative to the BRI.

Global Reaction:

Legislative Response: The U.S. House Select Committee on the CCP released a bipartisan report outlining a legislative agenda to counter the BRI globally. G7 leaders have shown a willingness to collaborate and provide alternatives to countries dealing with China.

Vietnam: A New Battleground:

Geopolitical Influence: As China’s trade with the U.S. and Europe declines, the ASEAN region becomes more critical. Vietnam, China’s largest trade partner in the ASEAN bloc, has become a battleground for influence.
U.S. Alternatives: The U.S., through its PGI, aims to invest in Vietnam-based projects, signaling an alternative to China’s BRI. The geopolitical tussle in the region is evident as both countries vie for influence.

Conclusion

China’s Belt and Road Initiative, once hailed as a transformative global project, is facing headwinds as countries reassess their participation due to concerns over hidden military agendas, corruption, and economic viability. The shifting geopolitical landscape and the emergence of alternative initiatives signal a challenging decade ahead for the BRI. As the global community becomes more skeptical, China’s ability to reshape the world through the BRI may face increasing resistance and competition.

Input from agency