29 Aug What happened to China’s Belt and Road mega project?
Twelve years have passed since China launched its ‘Belt and Road Initiative’ to connect the Asian powerhouse to the rest of Asia, Europe, Middle East, Africa and Latin America. Much of the hype around the mega investment and infrastructure project has now died down. The idea was to boost China’s economic and trade partnerships in the process, with the BRI billed as a mutually beneficial vehicle for development, foreign direct investment, economic growth and cooperation. But the project’s heyday feels like a long time ago. Increasingly, the initiative has been seen as luring in low income countries with promises of lofty investment, but saddling them with unsustainable debts. The project has also been tarnished by concerns surrounding governance, societal inequality, corruption and the environmental impact of largescale infrastructure schemes. For its part, China, says the BRI has contributed to the social and economic development of member countries , created thousands of jobs and alleviated poverty, as well as spurring economic growth and commercial partnerships. Analysts say the project has evolved over time. “It’s been over a decade now, and China’s position in the world has changed and there’s been a lot of learning in the process,” Ilaria Mazzocco, deputy director and senior fellow with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies, told CNBC. She added that China increasingly started to focus on “small but beautiful projects.” “The BRI was characterized by these very high risk projects in countries with a lot of governance issues in many cases, and that’s created a lot of debt and a lot of problems, and Chinese companies have not always delivered. That’s created political problems for Beijing.” Amid a raft of criticism, significant adjustments were made “with a movement towards less risky projects that are in countries that may be a little more stable for China, and for Chinese companies to operate in,” she stressed. China’s approach has become far more nuanced and careful when it comes to financing of projects in the developing world, Mazzocco noted: “It’s gone from these very public, high-profile, high -prestige projects to approaching it in a more careful way that maybe gets higher returns in the long term for China.” The evolution of the BRI Let’s go back to the beginning. Chinese President Xi Jinping launched the BRI to much fanfare in 2013 as a modern-day “Silk Road” central to Beijing’s foreign policy. It aimed to expand and extend China’s economic and geopolitical influence while offering partnering countries Chinese clout — namely government-backed loans, investment and the prospect of future growth. The plan was to create an overland economic belt made up of road, rail and energy infrastructure, as well as a maritime one, through the development of deep-water ports. First introduced as “One Belt, One Road,” the venture and its adjacent projects later became collectively known as the Belt and Road Initiative. Cumulatively, Chinese BRI engagement has reached $1.308 trillion since 2013, of which $775 billion in construction contracts and $533 billion in investments, the Green Finance and Development Center, based at Fudan University in Shanghai, stated in its July BRI investment report . As of May, the prospect of infrastructure investment and a link to the world’s second largest economy has enticed up to 150 countries — representing around 40% of global GDP — to join the BRI through Memoranda of Understanding with China, the GFDC added. Cracks have appeared in the project’s lofty ambitions, however, amid accusations that the venture has been typified by unsustainable financing models for developing countries that had few other alternative forms of investment. Italy and Panama abandoned the BRI in 2023 and 2025, respectively. Their departures reflect disappointment over unmet expectations and wider geopolitical and strategic concerns. For good and bad Rome signed an MOU with China in 2019, hoping to leverage China’s economic clout. Four years later, it exited the BRI before the agreement was set to be renewed, with Foreign Minister Antonio Tajani stating that the partnership had “not produced the desired effects” in terms of trade and investment. Italy, the only Group of Seven (G7) nation to sign up to the BRI, had hoped that the pact would increase its sales to China. Yet Italian exports to China saw minor increases, compared to Chine’s own deliveries to Italy over the period of Rome’s BRI membership, according to data from the Observatory of Economic Complexity. Panama, the first Latin American country to sign up to the BRI, also chose not to renew its membership of the initiative this year, following pressure from the U.S. Washington was concerned over expanding Chinese influence in what the U.S. sees as its backyard, particularly when it comes to the critical Panama Canal. China’s foreign ministry accused the U.S. of “smear and sabotage,” while U.S. Secretary of State Marco Rubio hailed Panama’s BRI withdrawal as a “great step forward” for its ties with the White House. Analysts stress that it’s natural that the BRI would experience both failures and successes. In the former camp, the construction of railroads and roads, particularly in Asia, improved connectivity and commercial links between China and its neighbors for travel and trade. The China-Laos railway — a key BRI project that opened in 2021 and will eventually expand to connect with Thailand and Singapore — has been hailed for boosting tourism and trade. On the other side of the spectrum, ambitious projects such as Chinese state-owned company Sinohydro’s Coca Codo Sinclair Hydroelectric Dam in Ecuador have been dogged by concerns over poor quality build, alleged corruption and environmental impact. “There’s been railroads, there’s been roads. I think these things have been actually quite transformational on the ground, and we tend to overlook them because there’s no protest, right? But they actually have been seen very positively at the local level,” CSIS’ Mazzocco said. While the West tended to view the BRI as “debt trap diplomacy,” it remained an attractive option to countries that lack alternative sources of investment and development. “While more and more stories are emerging from countries that paid a heavy price for BRI project financing, the conditions that made the initiative attractive to these countries in the first place — the lack of available assistance on high priority development projects — remain,” Mark A. Green, former U.S. ambassador and president emeritus of the Wilson Center, noted last year. “The best way to “defeat” BRI is to “beat it” and help developing countries as they pursue their national goals and aspirations,” he said.