What is the Belt and Road Initiative REALLY about?

Megaprojects explains the Belt and Road Initiative:

This is a rather comprehensive video explaining China's Belt and Road Initiative.

The BRI is the initiative of Xi Jinping, announced in 2013. Prior to that, China's guiding principle was from Deng Xiaoping: "Hide your Strength and Bide your time."

Apparently, when Xi took over, he decided that the time to hide your strength and bide your time was over; that China's time to shine has arrived; that China was ready to take to the stage as a world leader, and to displace the current world leader.

One Belt, One Road

So he started the BRI (originally called, "One Belt, One Road" which was kinda clumsy). The ostensible purpose of the BRI was to connect China to the rest of the world, by the "Old Silk Road", as well as via the maritime routes. China would help nations along the Belt and Road to develop their infrastructures to support trade along the Old Silk Road and the maritime trade routes. 

So China would LEND the money needed to build railways and roads and bridges and ports, and provide the technical and development expertise, and also the labour to construct these infrastructures. 

Yes. China would lend the money, and provide the construction company and the labourers (from China) to build the infrastructure. At the end of the project, the country would have a new railway or a new port, and a debt to China.

Looking at this optimistically, this was China using their resources to help their neighbours develop needed infrastructure. And developing trade. And international relations. And winning friends and influencing people.

All good things.

The Jaundiced Eye

But the world is cynical and critical and has a jaundiced eye.

Politics

One view of the BRI was that it was China trying to win friends and influence people (or nations). On the more benign level, China was seen as simply trying to "buy" friendships on the international stage. Less charitable perspectives saw China using Debt-Trap Diplomacy as evidenced by the acquisition of Hambantota port in Sri Lanka.  

China sought to be a "facilitative" lender and not have so many criteria or terms and conditions. They were "easy lenders". But as a result, lots of the "borrowers" borrowed exorbitantly, imprudently, and as a result were unable to repay their loans. 

In many cases, projects were not completed, abandoned, or even if completed, turned out to be while elephants unable to generate returns to pay off the loans. There was corruption, with loans siphoned off by corrupt officials, usually the leader of the government.

If China was trying to win friends and influence people, this was not a very effective way.

Economics

The more pragmatic view of the BRI, would be the economic objectives:

They will 1) generate enough demand abroad to keep their excess steel mills, cement plants and construction companies in business, so preserving jobs at home. 2) They will tie neighbouring countries more closely into their own economic orbit, so enhancing both their hard and soft power around the region. 3) They will further their long term plan to promote their own currency as an international alternative to the US dollar. And 4) to finance it all, they will set up a new multi-lateral infrastructure bank, which will undermine the influence of the existing Washington-based institutions, with all their tedious insistence on transparency and best practice, by making more “culturally sensitive” soft loans. [i.e. bribes] The result will be the regional hegemony they regard as their right as Asia’s leading economic and political power.

The above is from Tom Holland. No not the actor who plays Spiderman. This is the former SCMP staffer who noted that China's BRI (or "One Belt One Road" as it was initially known as) was a beat for beat copy of the Japanese initiative from the 1990s, with the objective of "boosting China's slowing economy." (Megaproject video, 11:45).

So, the song and the lyrics are the same. Or maybe China is, as usual, copying other countries playbook.

But in 2016 (when Tom Holland wrote his analysis), he already predicted that China's BRI will fail as did the Japanese's plan. 

As China has learned at home, building a new high speed rail line or state of the art airport is easy enough given plentiful funding. But building a high speed rail line that is economically viable is altogether more difficult.

Holland's analysis, or comparison with the Japanese plan 20 years ago, pointed out the logistical and structural issues that would undermine the BRI. How the BRI projects could never absorb all the excess capacity that China had or would be having. And how the neighbouring countries lacked the "human and institutional capital" to operate the infrastructures efficiently and effectively.

And that was before things went awry.

The best laid plans...

The pandemic derailed, delayed many of the projects, or even increased the costs of some projects. That was bad (for the various BRI projects).

Then Russia invaded Ukraine, and that disrupted a major component of China's plan to go thru Ukraine for many resources - Energy, Food, and Military Technology.

So with the inherent flaws of the plan, the poor loan risks of recipient countries, the corruption, the lack of human and institutional capital that running the infrastructures needed, coupled with the world-wide disruption from the pandemic, and the ill-timed invasion of Ukraine, the results of the BRI has been dismal and disappointing.

China has had to forgive many loans because the recipient countries were unable to repay the loan as the infrastructures failed to pay their way, if they were even completed and not abandoned part way due to corruption and other factors.

Strategic Positioning.

Another perspective is that the BRI was a strategic move to expand China's options. 

China is being contained by the US and her allies from freely accessing the Pacific Ocean with the First Island Chain stratagem. This is the reason China wants to "reunite" with Taiwan. Possession or Control of the island would give China access to the Pacific. Taiwan is the key to breaking the First Island Chain.

However, China's ability and chances of taking Taiwan decisively is not good. While China may be a match for the US, the US has since rallied her allies - Japan, Philippines, Australia, and maybe South Korea. 

Against the allies, China's chances are much slimmer. Even if China prevails, the cost to China's military assets may well prove the victory pyrrhic. 

The BRI with the China-Pakistan Economic Corridor, would allow China to access fuel from the Middle-East while by-passing the Malacca Straits and the South China Sea. 

If the Gwador Port is upgraded and connected to Xinjiang, China would have a fuel supply it could control and would not be subject to the bottleneck at the Malacca Straits. 

And the overland rail network to Europe would connect China to markets in the West and resources. Except for the Russo-Ukraine war.

So the BRI may have a secondary (or even primary) objective of providing China with other channels  to secure resources should the primary channels (maritime shipping) be blockaded or interdicted for whatever reason (e.g. war).  Except that the failure of the BRI projects to be successfully completed and operational, as well as the disruption from the Russo-Ukraine war means that even this strategic objective has been foiled.