Belt and Road Initiative (BRI) – China’s supply chain game plan

Abstract:

China is the country with the highest population and second-largest economy with approx. $ 14 trillion in the world. China embarks on the fastest growing economy in the last 2 decades based on their mass production strategy with cheaper prices, led China to become the manufacturing hub of the world. However, saturated domestic markets and changing geopolitical conditions with the rise of India given a pause to China’s momentum of growth in this decade of 2011 – 2020. In this quest of giving stimulus to the Chinese economy, President Xi Jinping has given an idea of “One Belt One Road (OBOR)” which was basically an ultramodern blueprint of the ancient “Silk route” which has connected East to West during the time of Han Dynasty. Later on, OBOR has been termed as Belt and Road Initiative (BRI) which has mainly 1 belt that covers the landscape of China, the middle east, central Asia to Europe, and 1 maritime road moved from South China sea to the pacific ocean to India ocean. BRI is a win-win formula for China and some of 65 partner countries which include the development of infrastructure, transportation, and energy generation and movement. It looks like a trading and supply chain initiative encapsulated with global strategic and geopolitical agendas of China to secure strategic resources and assets, get logistics and military access to strategic ports in partner countries, and influencing them with the debt-trap model. Many powerful and globally important countries like Russia, the USA, European Union, and India have raised their concern about BRI for lack of transparency, debt trap for small countries, and tool for China’s expansionist agenda. However, it is definitely China’s biggest supply chain game plan of the century which can help China to become the next superpower if handled properly and if China fails to handle it then it will be a “Blackhole” for China’s and partner countries economy.

History

In Chinese history, the “Ancient silk route” has its own importance being the main vein for trade between East and West mainly include the trade of silk from China to Europe passing through far and middle east countries. It has its roots in 130 B.C. from the time of the Han Dynasty and was useful for nearly about 600 long years which helped China to expand its culture, knowledge, and know-how across Europe and Asia. It was the first of its kind inter-continental route which has given a boost to ancient supply chain and logistics functions. It has also opened the routes for political, economic, and strategic relations between various countries and civilizations.

Idea & Evolution

China has the world’s highest population and its economy outgrown at the highest pace in the last decade, but after 2010 China witnessed saturation of domestic markets and declined export sales. Hence, China was forced to look beyond the borders to get opportunities for capacity utilization of high production intensive enterprises.

In 2013, China’s President Xi Jinping proposed to its neighbours the Belt and Road initiative (BRI), formerly known as the “One Belt, One Road (OBOR),” with the aim of adding $2.5 trillion business over the next 10 years with the nations along the proposed routes.

The BRI has comprised of two main components: a) The Belt refers to the roads/rails/pipelines in the regions of Asia and Europe lands; and, b) The Maritime Road, which comprises maritime routes connecting the Association of Southeast Asian Nations (ASEAN) countries. All previous projects and routes between China and other countries have been absorbed in BRI and China is developing such more regional routes under the scheme of BRI.

It is the most ambitious and gigantic supply chain concept to build and upgrade highways, railways, ports, energy and electricity generation, and other infrastructure throughout Asia and Europe designed to enrich the economies of China and some of 65 partner countries. BRI could be a multi-trillion-dollar scheme and has generated enthusiasm and hopes in other countries of the world but at the same time, the expansionist attitude of China has generated a lot of worries and skepticism in the Asia-Pacific region and across the world.

Aim & vision

After a decade of embarking and an engrossing economy based on a foundation of mass production at cheaper rates gave momentum to China but in a current competitive scenario, saturated domestic markets, and the rise of other countries like India have reduced consumption of Chinese goods domestically and outside China. China has understood that to give another stimulus to the economy for the next 2-3 decades it is most important to strengthen the logistics and supply chain across the needy countries which have a higher population and disposable income but lack of organized markets and connectivity to boost the business. Looking to hit this objective along with the inner ambition of becoming the next superpower, China has focused to develop BRI as a tool for development.

Vision:

• Optimization in cost and time of transportation to potential markets in the world.
• Focus on developing BRI partner countries’ markets for infrastructure development and equipment manufacturing by providing a low-interest loan with the condition of awarding the contract to Chinese firms or using Chinese labours.
• Inclusion of China’s currency Renminbi (RMB) in global reserve currency as like the US Dollar, Japan’s Yen, British Pound, and Euro. In 2015, China has joined the European Bank for Reconstruction and Development (EBRD), China has founded the Asian Infrastructure Investment Bank (AIIB). These steps yielded success, and the International Monetary Fund (IMF) added the renminbi to the Standard Drawing Rights (SDR) Basket.
• Being the largest oil consumer and the biggest net importer of crude, it is of prime importance for China to secure energy supply through new pipelines in Central Asia, Russia, and Southeast Asia’s deep-water ports. Energy sufficiency has been a consistent worry for China.
• A win-win strategy of Infrastructure development in countries along the Belt and Road routes may increase growth in their economies and thus contribute to a growing demand for China’s goods and services.

This renewed and ambitious idea — potentially involving an area equal to 55 percent of the global GDP, 70 percent of the global population, and 75 percent of the known energy reserves — could, and is, reshaping global supply chains.

BRI’S FIVE GOALS

According to President Xi Jinping, following are BRI’s five goals with significant milestones.

Policy coordination: China has signed cooperation agreements with more than 60 countries and organizations.

Facilities connectivity: The New Eurasian Continental Bridge, the China-Mongolia-Russia Economic Corridor and CPEC are three examples.

Unimpeded trade: Beijing says this exceeded $3 trillion between 2014 and 2016, with China’s investment in those countries surpassing $50 billion. Its companies have established more than 50 economic cooperation zones in more than 20 countries, generating 180,000 jobs and over $1 billion in tax revenues.

Financial Integration: New or enhanced mechanisms include the Asian Infrastructure Investment Bank (AIIB), the Silk Road Fund, the New Development Bank―also known as the BRICS bank―and the 16+1 financial holding company between China and countries in Central and Eastern Europe. These institutions have billions to invest in BRI projects and will play a more prominent role in the coming years.

People-to-people bonds: This has seen increased cooperation in the spheres of science, education and health, with Beijing providing 10,000 scholarships annually. China knows BRI’s success depends in large part on support in its host countries.

Timeline (2013 to 2019)

Belt and Road Initiative was started way back in 2013 wherein President Xi Jinping has raised this idea during visits to nearby countries. At that point in time, it was known as “One Belt One Road (OBOR)” which was later on changed as a “Belt and Road initiative.” In, 2019 there was second BRI summit was organized by China with partner countries in a time where IMF has also pointed out BRI as a very high-interest rate’s debt model for partner countries. A brief year-to-year summary is given below.

Partnering Countries: 

A-C	Afghanistan, Albania, Algeria, Angola, Antigua & Barbuda, Armenia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Bhutan, Bolivia, Bosnia & Herzegovina, Brunei, Bulgaria, Burundi, Cambodia, Cameroon, Cape Verde, Chad, Chile, Republic of Congo, Cook Islands, Costa Rica, Cote D’lvoire, Croatia, Cuba, Czech Republic, China
D-K	Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Estonia, Ethiopia, Fiji, Gabon, Gambia, Georgia, Ghana, Greece, Grenada, Guinea, Guyana, Hungary, Indonesia, Iran, Iraq, Israel, Italy, Jamaica, Jordan, Kazakhstan, Kenya, Korea, Kuwait, Kyrgyzstan
L-N	Laos, Latvia, Lebanon, Libya, Lithuania, Luxembourg, Madagascar, Malaysia, Maldives, Malta, Mauritania, Micronesia, Moldova, Mongolia, Montenegro, Morocco, Mozambique, Myanmar, Namibia, Nepal, New Zealand, Nigeria, North Macedonia
O-S	Romania, Russia, Rwanda, Samoa, Saudi Arabia, Senegal, Serbia, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, Somalia, South Africa, South Sudan, Shri Lanka, Sudan, Suriname, Syria
T-Z	Tajikistan, Tanzania, Thailand, Timor- Leste, Togo, Tonga, Trinidad and Tobag, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, Uruguay, Uzbekistan, Vanuatu, Venezuela, Vietnam, Yemen, Zambia, Zimbabwe

Coverage – Road, Rail, Water and Air

As the names suggest, it will connect China via land and sea with the rest of the world. The belt mainly follows the historic Silk Road through Central Asia, West Asia, the Middle East, and Europe Southeast Asia, Oceania, and Africa.

The Maritime Silk Road will continue through Southeast Asia, Oceania, and North Africa and includes the highly contiguous South China Sea. China also plans to connect inland cities to the Indian Ocean to seaports on the east coast, including the transport of oil from Iran and Iraq directly to China by rail which will affect trade through the Malacca Strait which has very significant importance in the logistics from and to China from rest of the world.

In addition, the BRI concept covers the China–Pakistan Economic Corridor and the China-Myanmar-Thailand Corridor, by which China plans not only to connect inland cities to the Indian Ocean by rail connections to seaports on the east coast but also to transport oil from Iran and Iraq directly by train to China, rather than by sea.

Funding -Supporting Institutions & Payback

Chinese banks hold more than $15 trillion in deposits. The country’s foreign exchange reserves are over $3 trillion. The big four state-owned banks—the Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China—have all evolved from government organizations into semi-corporate entities and are the main channels for financing the Belt and Road Initiative.

The Bank of China has already paid out $82 billion to three policy banks supporting Belt and Road projects: $32 billion to China Development Bank, $30 billion to Export-Import Bank of China, and $20 billion to the Agricultural Development Bank of China. The Chinese government has also earmarked $40 billion for the state’s Silk Road Fund, money that comes directly from the national budget. The multilateral Asian Infrastructure Investment Bank (AIIB), founded in 2014 over the objections of the United States to finance Asian infrastructure, has contributed $12 billion to the initiative, and its founders expect that it will eventually be able to lend $20 billion to $25 billion a year.

The government has also expected that BRICS bank and the Shanghai Cooperation Organization to “support the efforts of governments of the countries along the Belt and Road and their companies and financial institutions with good credit rating.” The participation of so many countries in the two new multilateral development banks will facilitate rapid staffing with experienced professionals from other international financial institutions and thus support a large volume of financed projects.

Investment scope:
Many countries in the Belt have rushed to join the China-led Asian Infrastructure Bank (AIIB) which some suggest is China’s answer to the American Trans-Pacific Partnership and The Transatlantic Trade and Investment Partnership. The AIIB is dedicated to lending for infrastructure projects with an authorized capital of $100 billion, 75% of which will come from Asian and Oceanian countries.

Strategy

China has implemented mainly 2 types of strategies in which one strategy is to take out its growth model to other partner countries to lead the industrial trade pattern optimization which can give a boost to China by getting new business whereas the second strategy is adjustment strategy to facilitate bilateral trade, international production co-operation, cross-border Electricity, and E-commerce business, promoting the technology with traditional logistics to form global and professional thinking keeping national strategic interest in the center of the thought. Following are the key strategies:

• Development of Node Ports in the sea: Maritime sea route is of prime importance for China as 90% of total international trade and import of necessary energy resources are done through this route. For ensuring safe passage and safety & security of this route, China is focusing on the development of node ports on strategic locations of partner countries where sooner or later China will get Logistics and Military access which will increase its importance in South China and Indian sea. e.g. Gwadar Port in Pakistan, Hambantota port in Sri Lanka, etc.

• Made in China 2025 and Equipment “Go Out” Strategy: China wants to replicate its growth model to partnering countries and for the same, they are promoting high-speed rail projects for personal and industrial movement, road and infrastructure development projects which can give business to Chinese Enterprises and develop ultramodern supply chain infrastructure which opens markets of third world countries for China’s materials and services.

• Electricity and Energy Generation Projects: For any economy, energy and electricity are the prime sources for industrialization and growth factors. China is developing Hydro-power and nuclear power plants to BRI partner countries to promote the industrial growth

• Cargo and Ship Development: Maritime transport is the cheapest source of transportation of goods on a mass scale and it can boost the transportation of Chinese enterprises, skilled labours, etc to go out of China and give impetus to the economy.

Challenges/ Threat

• Implementation of Projects: China is banking on importing equipment and low-cost financing with quality deliverance as a success factor in partner countries’ projects. However, it is a big challenge that Chinese Enterprise can deliver projects efficiently in a time-bound and cost-effective manner which causes deterioration of bilateral trade by eroding the image of China. E.g. Incomplete tasks of Poland’s A2 Highway and electricity grid of Eskisehir in Turkey.
• Selection procedure for Project Financing: Chinese State Banks are less experienced and not equipped with stubborn policy for project viability study as compare to their competitors like Asian Development Bank (ADB) or European Bank for Reconstruction and Development cause high-risk investment which may not give proper returns. e.g. Railways and Road Projects in Central Asia
• No distinct difference between China’s Economic and Political stand on the BRI project has a dual deleterious effect: (1) investments will not achieve the required returns, and (2) they may turn other countries—such as India, Russia, or the United States—against China’s new initiative.
• Financial Sustainability risk: Initially it was planned that BRI funding shall come from multilateral institutions like AIIB, ADB, and BRICS bank but actually it came from Chinese bilateral policy banks like China Development Bank and Exim Bank which are known for their risk appetite. In China, their banks are protected by Government in the Domestic framework, however, it is not the case in the case of international markets. Underdeveloped countries like Pakistan and Venezuela require a very high initial investment to get up to the standard infrastructure and it has rare chances that such investments generate profits and not remain a relief aid or package. It increases the risk factor of BRI.
• Political and Economic Instability: Political and economic instability plays a very crucial role in BRI’s success as in most of the countries while changing Government; there are pauses, holds, terms renegotiation and termination particularly looking to China’s expansionist ambitions are feared by partner countries and they are asking for more details and reassurance from China that their intentions are not expansionist and it makes the process slower.
• Debt Trap Diplomacy: All countries are worrying about China’s policy of covering natural resources and strategic assets in return for the inability to repaying of loans given under BRI projects. Hence, it is a must to devise reasonable terms for heavily indebted countries to improve the public image of BRI. For partnering countries where States are not involved in the entire process as China does, China has to ensure proper project implementation and benefits to home states to improve the importance of BRI.
• Inclusion of the local element in BRI Project – China’s main motive under BRI is to give momentum to Chinese enterprises by using China’s goods and services in partnering countries which has created image is that BRI is beneficial to China only whereas China should focus to increase of local element where they can give employment and business to home state’s local players and people. It will help to boost the economy of the local home state and bolster the BRI’s inclusivity.

Opportunities:

• BRI is a strategy for China’s supply chain logistics network overseas development: China Promoted “Area along the way” strategy under which it is promoting transport infrastructure and communication facilities, supply chain logistics network to provide strong financial support and financial risk prevention and protection.

• The process of internationalization of the RMB to speed up the development of China’s supply chain logistics network overseas: RMB is Chinese currency and as a part of BRI initiative, China wants to make it international and want to add the same in global reserve currency to facilitate trade between China and Partner countries which will increase strategic importance of China’s currency. RMB internationalization trend will increase the internal and external financing channels of overseas investment of logistics enterprises, reduce the cost of raising capital or capital transactions, and improve the efficiency of financing, to provide a favourable financial guarantee for overseas investment and development of enterprises.

• The cross-border electricity business will become China’s supply-side reform of the new impetus: Electricity is the heart of any development of the industry as well as a civilization, hence China has kept a keen focus on Electricity generation at the partner states after the first and foremost need of infrastructure development. China has qualitative and competent enterprises which have a spare capacity as domestic demands are no more, hence this cross-border electricity business is quite lucrative in terms to find new markets for ideal enterprises and give momentum to partner countries which in turn increases the market for Chinese goods and services.

Benefits to China from BRI:

• Creating opportunities to generate higher returns on China’s vast foreign exchange reserves
• Helping China’s State-Owned Enterprises (SOEs) in construction and engineering to deploy abroad in search of more work and higher returns
• Ensuring China’s excess industrial capacity is exported to regional markets—either directly, through them soaking up production by virtue of growing their economies, or indirectly by importing China’s spare factories
• Expanding China’s export markets, and sending abroad more goods with higher value-added components, such as machinery and telecom equipment
• Boosting the internationalization of China’s currency renminbi (RMB) as SWIFT believes BRI is one of five enablers that will drive that process.

Benefits to partnering nations

• Opportunity to increase Infrastructure: BRI targets economies which need a boost and countries which are at a very low level in the Human Development Index (HDI) like Pakistan and Myanmar where no other countries are interested to invest as repayment of loans from such countries may be questionable. Such countries get the opportunity to develop infrastructure at their home states with the help of China in terms of economic investment and enterprise support under BRI.
• Transportation: BRI’s main objective is to develop transportation routes in states of partner countries which in turn will help to increase trade movement and give a boost to the economy. BRI has assisted many countries in developing infrastructure from transportation to electrical energy. For example, China has invested $14 billion in Eastern Africa Kenya’s Standard Gauge Railway (SGR). SGR is a 485km single-track railroad and acts as one of the most significant projects in Kenya. Further, Kenya and China further extending the same to Naivasha in the north-west. The SGR also facilitates local industries and trade between Africa and China.
• Energy: If Transportation is the wains of any economy then energy must be considered as Oxygen. BRI’s second focus after transportation is Energy.  BRI’s energy project in Pakistan — the Nehru Tim Jielu Hydro-power Station.  It is estimated to generate 5.15 billion kilowatt-hours with an investment of nearly about $4.3 billion in Pakistan where there are more than 500 million-megawatt deficits on the national grid. Power cuts are frequent in hospitals, commercial buildings, and residential buildings. This project will light up Pakistan and also assists in the nation’s economic development.
• Economics: BRI’s prime goal is to improve trade between countries with mutual economic benefits. For example, Kazakhstan is located in Central Asia and during pick winters there is barely any fruits and vegetables grow there. BRI connects Kazakhstan and China for cross-border trade of vegetables which provides Kazakhstan’s people with their basic needs with an estimated trade of more than $11 billion annually.
• Excavation of Natural Resources:  BRI also helps to develop infrastructure for the excavation of natural resources to countries like Brunei where resources are in abundance but the country has no technology and equipment available to get and distribute the same. Under BRI, China has provided a loan of approximately $2.5 million in financing loans for manufacturing Oil and Gas Pipelines. This investment not only generates $100 million, but it also offers more than 300 job opportunities.
• BRI shortens the distance between each country and promotes the global economy and will hopefully see ongoing progress and generate benefits for every country.

BRI’s role in Global Supply Chain and International Trade

The BRI is an umbrella initiative which encompasses multilateral financing, enterprise development and technology transfer between partner countries which enables flow of goods, investment and people. The new connections fostered by the BRI could reconfigure relationships, reroute economic activity, and shift power within and between states.

• BRI will improve intergovernmental communication to better align high-level government policies like economic development strategies and plans for regional cooperation. BRI is an incredibly ambitious plan that may potentially re-shape global trade.

• BRI will Strengthen the coordination plans mainly focusing on hard infrastructure like roads, hi-speed railways, marine routes and pipelines as well as Energy generation projects.
• BRI also facilitates soft infrastructure such as the signing of trade deals, aligning of regulatory standards and improving financial integration.
• Encouraging people-to-people connections by cultivating student, expert and cultural exchanges and tourism.
• In the era of online marketing and E-commerce, BRI opens gateway for E-commerce by developing Logistics infrastructure and co-operative trade deals between partner countries.
• In both supply and demand reforms, supply side should promote new innovations, IoTs, Internet application, industry 4.0 etc to reach upto new growth level.  New tends of China’s economic development and new changes in international geopolitical and economic shifts has open doors for China’s supply chain logistics network to speed up overseas distribution and realize industrial structure optimization.
• BRI is not a few of Chinese friend countries forum but rather a new concept of cooperation among many countries and various civilizations. It is a hidden call for power in form of public good that China would like to share with all interested countries and later on increase its strategic importance in the region.
• BRI is inclusive and advocates respect, tolerance, and dialogue among civilizations and countries at different stages of development.

China’s expansion strategies – India and other countries reaction

Pitched as a new Silk Road sweeping from Asia to Europe, China’s enormous BRI is an ambitious, multinational infrastructure project. However, region’s big and important countries evaluate as it’s not an economic initiative but it is a strategic expansionist view of China.

Russia: With Initial negative view towards BRI, subsequently Russia understood that BRI is less of a threat and more of an opportunity and has accepted an importance of China which is on the verge of becoming next superpower, hence Russia has tied up with China as a friend since both countries are standing on same communist principle and their joint confrontations with USA.

Russia has taken a balanced approach and certainly does not want China to own any projects: they must be joint ventures; over which Russia exercises ultimate control. Further, Russia has given limited entry to Chinese workers for this project.

Russia is also promoting its own symbolic answer to the BRI, the Greater Eurasian Partnership (GEP) through which Russia wants to show its own grand vision to the world and expects China will support the same with BRI.

Europe: Europe has considered China as “Systematic Rival” earlier and hold some of the crucial business with China. However, over the period of time, Europe mood has changed and make some benevolent attitude towards BRI. Italy and Luxembourg both signed memorandums of understanding on the BRI.

However, Europe’s attitude is getting changed towards China as Chinese enterprises are now not merely giving competition to European business in other countries. Further, Chinese counterparts of European enterprise has clear advantage in terms of low interest loan to be supplied by Government of China to other country for infrastructure development comes with conditions of giving business to Chinese enterprise or using Chinese resources.

With change of USA’s stand on European firms and China’s competitive edge has left no choice with European Union and make them more unite and competitive in international market to compete more aggressively.

India: India has eyed the BRI with suspicion since its announcement. India turned down China’s invitation to the inaugural Belt and Road Forum in May 2017 and has not even attended 2^nd BRI summit in 2019. Instead, it has made pointed statements about transparency and debt burdens.

India’s biggest objection is the China-Pakistan Economic Corridor, a section of the BRI that runs through the disputed territory of Kashmir. India views this as a violation of India’s sovereignty and territorial integrity. 

India believes China is using the BRI to expand and leverage its strategic advantages in the region. While acknowledging the need for infrastructure projects, India is acutely aware of a growing Chinese presence in its neighbourhood. Further China’s lack of support in UN on Pakistan supported terrorism in Kashmir has deepen the mistrust in India.

On contrary, India is trying to improve business relationships with its Asian neighbours, with multiple new projects. India has revived regional institutions such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). This allows India to collaborate with other South and South East Asian countries on connectivity and infrastructure development. India is also taking advantage of Japanese expertise in building infrastructure, by partnering with Japan to seek opportunities for joint projects in Africa, South Asia, and Southeast Asia.

United States: Unites States has welcomed the approach of development of infrastructure for inclusive development of global business however China should have shown more transparency and clear intentions.

The United States have expressed legitimate concerns about BRI’s implementation with higher corruption levels and poor-quality execution. If China can show that it’s making sincere efforts to put in place standards that promote transparency, fairness, and sustainability, then the BRI could generate more positive responses from the international community and move China toward a more responsible model of development.

China has reaffirmed time and again that BRI has strict commercial and developmental intentions and there is no strategic or military or expansionist intentions. Further, USA shall consider positive points of BRI and minimize negative points of BRI which will help third party countries to get support for both superpowers. USA should not be pointing out flaws of BRI and shall come with its own strategy to counter BRI.

China’s efforts to influence other countries’ understanding of the BRI?

China has made efforts to increase the BRI’s transparency. It encourages its officials, media commentators and scholars to explain the policy by interpreting, studying, and discussing it. By doing this, it hopes that domestic and international communities will better understand China’s point of view.

China is also trying hard to encourage foreign governments, businesses, and social organizations to share positive examples of their experiences of working with China on the BRI.

Finally, China is keen to prove that it will not coerce countries to sign onto BRI projects. To get this message across, China is refining its communications strategy to publicize that it will only work with willing partners.

Long Term Vision of China:

China’s BRI initiative has strategic and defense importance as well in the name of economic growth and business corridors. China is landing huge loans to small countries on very high interest rates. Later, if small countries failed to repay the amount to China then they will be forced to give civil and military access to Chinese force. It will help to get presence in all strategic locations in Indian Ocean, Pacific Ocean, South China Sea etc and it will be known as “String of Pearls” and this strategy will be used against India to reduce the importance of India in this region.

Conclusion – A supply chain game plan to boost economy and becoming superpower

After understanding BRI in details along with its strategic and geopolitical impacts on the global economy, first and foremost motive of China is to become next superpower by influencing the world through development of global supply chain network.  Following are the key insights of the BRI.

BRI is not merely a Chinese-funded infrastructure project and although State Owned Enterprises (SOEs) have undertaken the bulk of BRI projects to date, many more Private Owned Enterprises (POE) and Multi-National Companies (MNC) involvement in the near future is expected. Linked to this, many projects are underpinned by strong bilateral relationships between China and the countries concerned, which makes these investments more secure than outsiders might imagine.

BRI’s opportunities will become more significant and it shall be reviewed for a longer time-frame of 10 to 15 years and not within 5 to 7 years and although many projects involve higher risks than conventional investments as it is running in poor and underdeveloped countries, however it will surely give high returns and strategic importance to China in longer term.

BRI is a collaborative ecosystem that to date has focused on energy and infrastructure, but that over the next five years and beyond will evolve to concentrate on trade, manufacturing, the Internet, tourism and other aspects.

Many countries don’t understand the China’s view of BRI and seeing this initiative as comprising a different interpretation of globalization and measuring on financial returns only, however this is encapsulated in the principle underpinning BRI, “Trade together, build together, enjoy together.”

BRI is in part an initiative designed to push China’s economy to the next level and create a more equitable global system for trade.

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