China’s President Xi Jinping speaks during the opening ceremony of the third Belt and Road Forum for International Cooperation at the Great Hall of the People in Beijing on October 18, 2023.
| Photo Credit: AFP

China’s Belt and Road Initiative looks to become smaller and greener after a decade of big projects that boosted trade but left big debts and raised environmental concerns.

The shift comes as leaders from across the developing world descend on Beijing this week for a government-organized forum on what is known as BRI for short.

The initiative has built power plants, roads, railroads and ports around the world and deepened China’s relations with Africa, Asia, Latin America and the Mideast. It is a major part of Chinese President Xi Jinping’s push for China to play a larger role in global affairs.

Called “One Belt, One Road” in Chinese, the Belt and Road Initiative started as a program for Chinese companies to build transportation, energy and other infrastructure overseas funded by Chinese development bank loans.

The stated goal was to grow trade and the economy by improving China’s connections with the rest of the world in a 21st-century version of the Silk Road trading routes from China to the Middle East and onto Europe.

Mr. Xi unveiled the concept in broad terms on visits to Kazakhstan and Indonesia in 2013 and it took shape in the ensuing years, driving the construction of major projects from railroads in Kenya and Laos to power plants in Pakistan and Indonesia.

A total of 152 countries have signed a BRI agreement with China, though Italy, the only western European country to do so, is expected to drop out when it comes time to renew in March of next year.

“Italy suffered a net loss,” said Alessia Amighini, an analyst at the Italian think tank ISPI, as the trade deficit with China more than doubled since Italy joined in 2019.

China became a major financer of development projects under BRI, on par with the World Bank. The Chinese government says the initiative has launched more than 3,000 projects and “galvanized” nearly $1 trillion in investment.

China filled a gap left as other lenders shifted to areas such as health and education and away from infrastructure after coming under criticism for the impact major building projects can have on the environment and local communities, said Kevin Gallagher, the director of the Boston University Global Development Policy Center.

Chinese-financed projects have faced similar criticism, from displacing populations to adding tons of climate-changing greenhouse gases to the atmosphere.

Chinese development banks provided money for the BRI projects as loans, and some governments have been unable to pay them back.

That has led to allegations by the U.S., India and others that China was engaging in “debt trap” diplomacy: Making loans they knew governments would default on, allowing Chinese interests to take control of the assets. An oft-cited example is a Sri Lankan port that the government ended up leasing to a Chinese company for 99 years.

Many economists say that China did not make the bad loans intentionally. Now, having learned the hard way through defaults, China development banks are pulling back. Chinese development loans have already plummeted in recent years as the banks have become more cautious about lending and many recipient countries are less able to borrow, given their already high levels of debt.

Chinese loans have been a major contributor to the huge debt burdens that are weighing on economies in countries such as Zambia and Pakistan. Sri Lanka said last week that it had reached an agreement with the Export-Import Bank of China on key terms and principles for restructuring its debt as it tries to emerge from an economic crisis that toppled the government last year.

Future BRI projects are likely not only to be smaller and greener but also rely more on investment by Chinese companies than on development loans to governments.

Christoph Nedopil, director of the Asia Institute at Griffith University in Australia, believes that China will still undertake some large projects, including high-visibility ones such as railways and others, including oil and gas pipelines, that have a revenue stream to pay back the investment.

A recent example is the launch of a Chinese high-speed railway in Indonesia with much fanfare in both countries.

On the climate front, China has pledged to stop building coal power plants overseas, though it remains involved in some, and is encouraging projects related to the green transition, Mr. Nedopil said. These range from wind and solar farms to factories for electric vehicle batteries, such as a huge lithium-ion battery plant that has stirred environmental concerns in BRI-partner Hungary.

Residents walk by the logo for the Belt and Road Forum outside the China National Convention Center in Beijing, on October 16, 2023. A stream of leaders of emerging market countries are arriving in Beijing for a meeting organised by the Chinese government that will mark the 10th anniversary of its Belt and Road Initiative.
| Photo Credit: AP

China prepared on Monday to host representatives of 130 countries for a forum that will be overshadowed by the Israel-Gaza war, as an increasingly assertive Beijing is asked to help de-escalate the violence.

At the top of the invite list to China’s Belt and Road Initiative (BRI) forum is Russia’s President Vladimir Putin, on his first trip to a major global power since the Ukraine invasion threw his regime into international isolation.

Leaders have begun to trickle into the Chinese capital for a gala event marking a decade of the BRI — a key project of President Xi Jinping to extend China’s global reach.

While China hopes the forum will help boost its standing as a leading global power, Israel’s war with Palestinian militant organisation Hamas will continue to dominate the headlines.

Israel declared war on the Islamist group after waves of its fighters broke through the heavily fortified border on October 7, shooting, stabbing and burning to death more than 1,400 people, most of them civilians. Under heavy Israeli bombardment of the Hamas-ruled Gaza Strip, more than one million people have fled their homes in scenes of chaos and despair.

Israel’s bombing has left at least 2,670 people dead in Gaza, mainly civilians, and flattened entire neighbourhoods.

China’s Foreign Minister Wang Yi has condemned Israel’s actions for going “beyond the scope of self-defence” and called for it to “cease its collective punishment of the people of Gaza”.

“(Israel) should listen earnestly to the calls of the international community and the UN secretary general, and cease its collective punishment of the people of Gaza,” Wang said Sunday, in what is the strongest stance China has expressed so far on the conflict.

Beijing has been criticised by Western officials for not specifically naming Hamas in its statements on the Israel-Gaza conflict.

Mr. Wang had on Sunday spoken with US Secretary of State Antony Blinken, who called on China to use its “influence” in the Middle East to push for calm.

China has a warm relationship with Iran, whose clerical leadership supports both Hamas and Hezbollah, the Lebanese militant group that could open a second front against Israel.

Earlier this year, China brokered an entente between former regional foes Iran and Saudi Arabia.

Beijing’s special envoy Zhai Jun will visit the Middle East this week to push for a ceasefire in the Israel-Hamas conflict and promote peace talks, China’s state broadcaster CCTV said on Sunday, without specifying which countries he would visit.

Niva Yau, a nonresident fellow with the Atlantic Council’s Global China Hub, told AFP the BRI summit would allow Beijing to frame attendance as a gesture of support for its position.

“Any head of state that attends the summit, it’s almost as if they agree with Beijing’s positions on these global issues,” she said.

Strategic dependence

A number of leaders have already arrived in Beijing ahead of the two-day forum, which kicks off Tuesday.

Among them are Hungarian Prime Minister Viktor Orban, Chilean President Gabriel Boric, Kenyan President William Ruto and Ethiopian Prime Minister Abiy Ahmed.

On Monday Russia’s top diplomat Sergei Lavrov flew into Beijing and within hours held talks with China’s Foreign Minister Wang Yi.

Mr. Putin — whose strategic dependence on China has only grown since his invasion of neighbouring Ukraine thrust his country into international isolation — is expected to arrive overnight.

This year, trade between China and Russia has soared to levels not seen since the beginning of Moscow’s war in Ukraine, with Chinese imports of Russian oil offering Moscow a critical lifeline as international sanctions bite.

China has refused to condemn the Ukraine war in an effort to position itself as a neutral party, while at the same time offering Moscow vital diplomatic and financial support.

At the heart of the deepening partnership is the relationship between Xi and Putin, who have described each other as “dear friends”.

Their alliance is also forged by a symbiotic necessity, each seeing the other as a necessary bulwark in their shared struggle against Western dominance.

In an interview with Chinese state broadcaster CGTN ahead of his visit this week, Mr. Putin hailed ties with Beijing and the “mutual benefits” of the BRI.

“President Putin pointed out that a multipolar world is taking shape, and the concepts and initiatives put forward by President Xi Jinping are highly relevant and significant,” CGTN reported.

“He stated that President Xi Jinping is a well-recognised leader on the world stage and is a true world leader,” it said.

Mr. Putin also reportedly “shared pleasant memories between President Xi and him, and hoped tradition continues when they meet in China in the future.”

A visitor poses for photos at the “Belt and Road” summit in Hong Kong, China September 14, 2023. As the BRI marks 10 years, China has pushed back against criticism of the plan, particularly with regard to projects leaving countries with debt. 
| Photo Credit: REUTERS

India is likely to skip China’s third summit marking President Xi Jinping’s signature Belt and Road Initiative (BRI), which, Beijing announced on Wednesday, will be held on October 17 in the Chinese capital.

Russian President Vladimir Putin is expected to attend the Belt and Road Forum (BRF) in Beijing, with the Russian leader also present at the previous two summits in 2017 and 2019. Sri Lankan President Ranil Wickremesinghe is also likely to attend, Sri Lankan media reported, among several leaders from countries in Asia, Africa and Latin America. Indonesian President Joko Widodo is also expected, according to reports.

Also read: Explained | What is the status of China’s Belt and Road Initiative in South Asia?

India did not attend the summits in 2017 and 2019, having raised concerns about the BRI, particularly over the flagship China Pakistan Economic Corridor (CPEC) project which runs through Pakistan-occupied Kashmir.

As the BRI marks 10 years, China has this week pushed back against criticism of the plan, particularly with regard to projects leaving countries with debt. Beijing, at the same time, appears to be rethinking how it goes forward with the BRI, and scaling back on investments. Reports last week, citing the minutes of a meeting between China and Pakistan, said Beijing had turned down requests for new projects there reportedly due to security concerns in Pakistan, which have not abated more than a decade into CPEC.

Li Kexin, Director-General of the Chinese Foreign Ministry’s Department of International Economic Affairs, told reporters on Tuesday that representatives from over 130 countries had already confirmed attendance at the BRF, which will open with a speech by President Xi. Mr. Li said more than 150 countries had signed on to the BRI so far.  “The circle of friends has grown larger and larger, which fully proves that the initiative does not seek to form any closed and narrow circles,” he said.

The total investment in the plan had reached $380 billion between 2013 and 2022, according to figures released this week by China’s Ministry of Commerce.

Also read: Analysis | China’s Belt and Road Initiative fuels Ladakh standoff

Some deals are expected to be signed on the sidelines of the BRF. Sri Lankan media reported further investments into the Colombo Port City project may be announced next week during Mr. Wickremesinghe’s visit.

Last month, Nepal agreed to take forward cross-border connectivity projects with China during the visit of Prime Minister Pushpa Kamal Dahal Prachanda to Beijing. Both sides “agreed to strengthen connectivity in such areas as ports, roads, railways, airways and grids in an orderly manner” and “jointly build the Trans-Himalayan Multi-Dimensional Connectivity Network”, as the cross-border plan under the BRI is called.