Chinese President Xi Jinping is gathering 29 heads of state and officials from more than 110 countries in Beijing starting May 14 for the first summit of his high-stakes Belt and Road Initiative. The $4 trillion plan offers the promise of economic growth, stability and increased connectivity for countries around the world. But it also faces—and creates—a host of complications for China and the other countries involved.  

Power lines near an industrial park in Eskisehir, Turkey, Nov. 27, 2015. In the summer, a Chinese company abruptly backed out of a deal to buy a stake in the electrical grid for Eskisehir and nearby provinces. Beijing’s effort to revive ancient trade routes, known as the Belt and Road Initiative, is causing geopolitical strains, with countries worried about becoming too dependent on China.
Power lines near an industrial park in a part of Turkey where China, in 2015, backed out of a plan to buy a stake in an electrical grid. Photo Courtesy of The New York Times/Byron Smith

The investment juggernaut would provide infrastructure, trade, financial, policy and cultural links to 65 countries in Asia, the Middle East, Europe and Africa over the next several decades. It has the potential to connect some of the world’s least developed countries for increased trade and spur their economic growth.

The effort also addresses some of China’s own domestic economic needs: access to natural resources and energy, a market for Chinese companies’ excess construction capacity, and more efficient and cost-effective ways for the country’s western and central provinces to get their goods to market.

Official statements emphasize that the initiative is rooted in the “Silk Road Spirit,”a reference to principles of “peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit.” They consider it China’s “gift” to “benefit people around the world.”

Yet, a lack of transparency about how these projects are identified, designed, approved and implemented raises many questions. The overall levels of investment might give China significant political and economic leverage over participating countries.  And China’s investments in ports, rails and road connections could have major military benefits. At the same time, the recipient countries might end up with unsustainable levels of debt, while neglecting to adopt adequate environmental standards and social safeguards. 

The initiative is still in its early stages. Despite making it one of the country’s top foreign policy priorities, China has not provided an official map or explained how the different projects fit together, and many of the proposed projects have not broken ground.

Chinese experts insist that most projects are profit-driven, but they concede that some are also pursued with other policy and strategic goals in mind. They are quick to note that the cost-benefit calculations of state-owned enterprises or companies receiving state-backed funding may differ from those of private companies in the West, because the Chinese companies can look for profits in aggregate, balanced over a collection of projects and a longer period of time.

Still, the risks for China are significant. Because the initiative involves some of the world’s most unstable regions, the projects could exacerbate existing tensions or even create new conflicts that overshadow the economic benefits. Without functioning institutions, reliable oversight, adequate regulations and good governance, some recipients may have difficulty absorbing the infusion of development and security assistance.

As more Chinese investments, citizens and companies establish a presence their own borders, instability abroad may make it difficult for Chinese leaders to maintain their principle of non-interference in another country’s internal affairs. If conflict threatens China’s national interests, including physical investments by its companies or the safety of Chinese nationals working abroad, officials in Beijing may feel compelled to respond, thus increasing the risk that China will become involved in conflicts around the globe.

Related Publications

Despite Ukraine Focus, Asia-Pacific to Play Prominent Role at NATO Summit

Despite Ukraine Focus, Asia-Pacific to Play Prominent Role at NATO Summit

Monday, June 27, 2022

By: Mirna Galic

NATO countries meet this week in Madrid, Spain amid Russia’s war on Ukraine, the biggest test the alliance has faced in decades. The summit is expected to focus heavily on demonstrating NATO’s unity, support for Ukraine and the bids of Finland and Sweden — propelled by Russia’s aggressive incursion — to join the alliance. But developments in the Asia-Pacific, chiefly the rise of China, will also be a top item on the agenda, with Australia, Japan, New Zealand and South Korea participating at the leader level for the first time at a NATO summit.

Type: Analysis and Commentary

Global Policy

The United States and China: Who Changed the ‘Status Quo’ over Taiwan?

The United States and China: Who Changed the ‘Status Quo’ over Taiwan?

Wednesday, June 22, 2022

By: Andrew Scobell, Ph.D.;  Alex Stephenson

Taiwan has been the perennial problematic issue in U.S.-China relations for decades. President Biden’s comments during a recent trip to East Asia put that in stark relief. When asked if the United States would be willing to “militarily defend” Taiwan if China were to invade, Biden said, “Yes, that’s the commitment we made.” Administration officials later appeared to walk back the president’s comments. But Beijing reacted forcefully, conducting military drills close to the island and with numerous Chinese officials condemning the comments. Most recently, at the Shangri-La Dialogue earlier this June, Chinese Defense Minister Wei Fenghe warned that the People’s Liberation Army will “fight to the very end” if Taiwan dares to “secede” from China. Beijing’s vociferous reaction to Biden’s comments underscores how contentious the Taiwan issue remains and how easily tensions can flare.

Type: Analysis and Commentary

Global Policy

The Latest on Strategic Stability in Southern Asia: 4 Things You Need to Know

The Latest on Strategic Stability in Southern Asia: 4 Things You Need to Know

Friday, June 10, 2022

By: Tamanna Salikuddin;  Vikram J. Singh

While the world focuses on Russia's invasion of Ukraine, there's another hotspot — China, India and Pakistan — where three nuclear-armed states share contested borders. In this video, USIP’s Tamanna Salikuddin and Vikram J. Singh discuss how to enhance stability in the region, the Biden administration's Indo-Pacific strategy, the prospects of nuclear talks in Southern Asia, and the impacts of the Russia-Ukraine war.

Type: Blog

Global Policy

Amid Ukraine War, U.S. Signals the Indo-Pacific is a Vital Priority

Amid Ukraine War, U.S. Signals the Indo-Pacific is a Vital Priority

Thursday, June 9, 2022

By: Mirna Galic;  Brian Harding;  Tamanna Salikuddin;  Vikram J. Singh

While the Ukraine war continues to dominate policymakers’ attention, the Biden administration has engaged in a series of diplomatic initiatives with allies and partners across the Indo-Pacific region over the course of the last two months. The message is clear: Washington sees the Indo-Pacific as the world’s principal geostrategic region, with a host of challenges to meet — like competition with China and climate change — and opportunities to seize, particularly related to technology and the economy.

Type: Analysis and Commentary

EconomicsGlobal Policy

View All Publications