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

Vikram Singh on the South China Sea

Vikram Singh on the South China Sea

Thursday, October 25, 2018

By: Vikram J. Singh

With trillions in goods moving through the South China Sea annually, it’s arguably the most important shipping lane on the planet, says Vikram Singh. While China says that it wants to keep the sea free and open for trade, most worryingly for the United States, Beijing has claimed it can deny access to military vessels, challenging the U.S.’ ability to maintain a balance of power in the region.

Economics & Environment; Global Policy

Why the U.S. Needs a Special Envoy for the Red Sea

Why the U.S. Needs a Special Envoy for the Red Sea

Tuesday, October 23, 2018

By: Payton Knopf

The Trump administration has appointed four special envoys to coordinate U.S. policy toward key hot spots: Iran, North Korea, Syria, and Afghanistan. Yet in the Red Sea—one of the most volatile and lethal regions of the world afflicted by several interconnected conflicts and rivalries that pose significant challenges to American interests—U.S. policy has been rudderless in large part due to the absence of a similar post.

Global Policy; Conflict Analysis & Prevention

America’s Vital Needs on China Policy: Realism and Strategy

America’s Vital Needs on China Policy: Realism and Strategy

Friday, September 28, 2018

By: USIP Staff

As U.S. national security debates focus heavily on the growing power and ambitions of China, two prominent members of Congress discussed how bipartisan policymaking can better protect America’s interests. Representatives Chris Stewart (R-UT) and Dutch Ruppersberger (D-MD) emphasized a need for strong engagement in Washington between the political parties, and for focused U.S. attention on China’s military buildup, intellectual property theft and cyber activities. Both congressmen are members of the House of Representatives subcommittee that oversees the U.S. foreign affairs budget, and both have played leading roles on national security and intelligence issues.

Democracy & Governance; Economics & Environment; Global Policy

China’s Evolving Role as a U.N. Peacekeeper in Mali

China’s Evolving Role as a U.N. Peacekeeper in Mali

Wednesday, September 26, 2018

By: Jean-Pierre Cabestan

Chinese troops have been stationed in Mali for the last half-decade as part of the UN-mandated stabilization force. Deployed after rebel groups overran large portions northeastern Mali in 2013, it was just the second time Beijing had ever contributed combat troops to a UN peacekeeping mission. This Special Report examines how China is using its peacekeeping activities in Mali as an opportunity to train troops and test equipment in a hostile environment—and as a way of extending its diplomatic reach and soft power in Africa and beyond.

Global Policy

View All Publications