China’s Belt and Road Initiative (BRI) is an ambitious programme to connect Asia with Africa and Europe via land and maritime networks along six corridors with the aim of improving regional integration, increasing trade and stimulating economic growth. The name was coined in 2013 by China’s President Xi Jinping, who drew inspiration from the concept of the Silk Road established during the Han Dynasty 2,000 years ago – an ancient network of trade routes that connected China to the Mediterranean via Eurasia for centuries. The BRI has also been referred to in the past as ‘One Belt One Road’.
The BRI comprises a Silk Road Economic Belt – a trans-continental passage that links China with south east Asia, south Asia, Central Asia, Russia and Europe by land – and a 21st century Maritime Silk Road, a sea route connecting China’s coastal regions with south east and south Asia, the South Pacific, the Middle East and Eastern Africa, all the way to Europe.
The initiative defines five major priorities:
- policy coordination;
- infrastructure connectivity;
- unimpeded trade;
- financial integration;
- and connecting people.
The programme is expected to involve over US$1 trillion in investments, largely in infrastructure development for ports, roads, railways and airports, as well as power plants and telecommunications networks.
The BRI’s geographical scope is constantly expanding. So far it covers over 70 countries, accounting for about 65 per cent of the world’s population and around one-third of the world’s Gross Domestic Product (GDP).
BRI at a Glance
How big is the BRI?
China has presented the BRI as an open arrangement in which all countries are welcome to participate. However, an official list of participating countries does not yet exist.
In our research we have focused on 71 economies geographically located along BRI transport corridors, including China. In 2017, these economies received 35% of global foreign direct investments and accounted for 40% of global merchandise exports.
How much does the BRI cost?
For the 70 BRI “corridor economies” (excluding China), projects in all sectors that are already executed, in implementation, or planned are estimated to amount to US$575 billion.
What potential opportunities does the BRI present?
If completed, BRI transport projects could reduce travel times along economic corridors by 12%, increase trade between 2.7% and 9.7%, increase income by up to 3.4% and lift 7.6 million people from extreme poverty.
What risks are involved with BRI projects?
The BRI presents risks common to many major infrastructure projects: debt risks, governance risks (corruption and procurement), stranded infrastructure, environmental risks and social risks.
What needs to happen for the BRI to succeed?
BRI transport projects have the potential to substantially improve trade, foreign investment, and living conditions for citizens in participating countries—but only if China and other corridor economies adopt deeper policy reforms that increase transparency, expand trade, improve debt sustainability and mitigate environmental, social and corruption risks.