China Watch: The Belt and Road Initiative Reboot

Download China Watch PDF

SUMMARY:  : Beijing is refocusing the Belt and Road initiative (BRI) away from large overseas infrastructure projects to investments in strategic technologies as it competes with the US and the West for influence.  Explicit support from Russian President Vladimir Putin gives the revamped BRI a decidedly anti-US tilt.   

On 18 October, PRC leader Xi Jinping rearticulated the future focus of the BRI at an international forum in Beijing marking the ten-year anniversary of the initiative, which has evolved from an infrastructure-heavy economic aid program to an integrated political, economic, and technological plan aimed at creating an alternative to the US-led world order.   The summit’s international attendees primarily came from the Global South and authoritarian countries in Europe, reflecting the BRI’s main target countries.     

• China has been scaling back BRI loans to foreign governments for large infrastructure projects because of difficulties collecting payments and international criticism of China’s “debt trap” financing.  About 60 percent of China’s overseas lending was in financial distress as of early 2023, according to AidData, a US-based research institute. 
• China is likely to focus more on smaller projects and investments in strategic sectors such as telecommunications, digital economy, and renewable energy.  China is making a renewed push for the Digital Silk Road initiative under the BRI, which is intended to increase the global market share of Chinese technology companies such as Huawei, Alibaba, and Tencent.  China has also invested heavily in solar energy projects in Africa, the Middle East, Central Asia, and South and Southeast Asia.        
• Xi included BRI as part of his Global Development Initiative (GDI), Global Security Initiative (GSI), and Global Civilization Initiative (GCI) , proposed in September 2021, April 2022, and March 2023, respectively.  Taken together, the three initiatives reject liberal development models and the “rules-based” international world order led by the US.

The BRI’s renewed focus on technology-based projects reflects Beijing’s desire for technological dominance in the Global South, as well as using third countries to acquire restricted technology from the West.  Effectively shut out of most European markets, telecom giant Huawei has had success promoting its 5G technology in the Middle East, including the United Arab Emirates (UAE), Saudi Arabia, Kuwait, Bahrain, and Turkey.

• At the BRI summit, Xi called for more scientific and technological cooperation among BRI participants, including establishing joint research centers and offering scholarships to promising scientists from BRI participant nations.  Beijing likely intends to use these joint projects to increase its technological influence globally and to acquire sensitive technology from the West through third countries due to increasing export control restrictions aimed at China.  
• Beijing has been courting US allies in the Middle East, particularly the UAE and Saudi Arabia, as collaborators and investors in artificial intelligence (AI)-related research.  Their close collaboration has prompted Washington to place export restrictions on certain advanced AI chips made by Nvidia and AMD destined for “some countries” in the Middle East, according press reports.  Although the reports do not name specific countries, the restrictions were announced shortly after media reports revealed that Saudi Arabia and the UAE had been buying large quantities of advanced US-origin AI chips.      

Putin attended the BRI summit and strongly endorsed Xi’s strategy of using BRI to push an alternative world order, reinforcing the initiative’s anti-US and anti-Western tone.  Italy, the only G-7 country to join the BRI, in September 2023 informed Beijing that it intended to exit the initiative.    

• PRC media gave Putin’s visit prominent coverage, airing an interview on state television, in which Putin praised the BRI as an exemplary “multipolar” approach to international relations.  Putin dismissed the US-led “rules-based” system of international order, saying that “nobody has seen these rules” and that they were written by “colonialists” to reinforce their dominance.  Putin’s comments were well-received by Chinese citizens, who are sensitive to China’s past humiliations at the hands of Western and Japanese conquerors.  
• Putin and Xi vowed to deepen bilateral relations and promised to consult each other on major world developments.  Russia and China have taken a unified position on the Israel-Hamas conflict, calling on Israel to show restraint while refraining from explicitly criticizing attacks from Hamas.