It consists of two main components: an overland Silk Road Economic Belt connecting China with Central Asia and beyond, and an ocean-based 21st Century Maritime Silk Road to China’s south. Functionally, the initiative aims to improve hard infrastructure, soft infrastructure, and even cultural ties. Geographically, it includes roughly 65 countries comprising about 70 percent of the world’s population. Economically, it could involve Chinese investments approaching $4 trillion. The scope and scale of the initiative are somewhat elastic, but all signs point to an ambitious and consequential endeavour: a future where all roads lead to Beijing.
The Belt and Road initiative is Xi’s signature foreign policy effort. Following on from his meeting last month in Florida with President Donald Trump, the forum represents the next way station in a series of carefully choreographed events designed to burnish Xi’s international leadership credentials and showcase his domestic strength on the road to the 19th Party Congress in the fall, where he hopes to recast the new Politburo lineup in his own image and further establish his position of primacy within the leadership. The forum also will provide Xi with a stage for tweaking the overall vision—as well as laying out some new specific projects—of the initiative after what is widely acknowledged to have been a slow and uneven start. He likely hopes, for example, to demonstrate how the initiative can serve as an integrative platform for coordinating China’s “alphabet soup” of initiatives—such as the Shanghai Cooperation Organization (SCO), the Brazil, Russia, India, China, and South Africa (BRICS) forum, and the Forum on China-Africa Cooperation (FOCAC)—which were begun under his predecessors but have had little to show in terms of concrete accomplishments.
The Belt and Road has elicited a range of interest, competition, and caution. Reactions are strongest within Asia, which has enormous infrastructure needs. According to the Asian Development Bank, developing Asia must spend $26 trillion by 2030 to maintain its growth, eradicate poverty, and respond to climate change. Many of Asia’s smaller economies have been eager to cooperate with the Belt and Road, particularly to attract infrastructure investment as they aim to develop further and grow into hubs along emerging trade routes. For similar reasons, there are also eager participants in Africa, South America, and some parts of the Middle East.
But Asia’s smaller economies are not limiting their options, and many are also tapping into competing initiatives. Indeed, China is not the only country with big connectivity plans. Japan has launched the Partnership for Quality Infrastructure, a $200 billion, five-year effort that prioritizes east-west connections, particularly in Southeast Asia. India is primarily focused on improving its internal connectivity but has invested in a few strategic projects beyond its borders. Russia’s Eurasian Economic Union covers much of the territory through which overland routes between China and Europe must pass, and President Vladimir Putin will be attending the forum. South Korea, Turkey, and others are advancing their own visions for the region.
Europe and the United States have been more cautious. Reactions within Europe vary widely, with Eastern European states generally more eager to participate in the Belt and Road than their Western neighbors. To date, Prime Minister Paolo Gentiloni of Italy is the only leader from a Group of Seven (G7) country expected to attend the forum. France and Germany are expected to send senior officials. The United States is not expected to send a high-profile representative.
The primary reasons for caution are threefold. First, there are concerns about standards, particularly whether new projects will adhere to adequate environmental and social safeguards. The Chinese-backed Asian Infrastructure Investment Bank (AIIB) claims it will apply existing best standards but more efficiently; AIIB president Jin Liqun has said the Bank will be “lean, clean, and green.” Second, there are economic concerns about unsustainable debt and financial risks, given China’s desire to export its overcapacity, the challenging nature of large infrastructure projects, and the difficult geographic and political environments the Belt and Road aims to traverse. Finally, there are strategic concerns about the Belt and Road’s drivers and implications. Railways, ports, and other infrastructure projects are dual use, leading to speculation that the real value in some economically questionable projects is their military utility. Over the longer term, even more consequential would be the economic power and influence that would accrue to China if the Belt and Road’s ambitions are fully realized.
As an Asia-Pacific power, the United States has significant economic and strategic interests at stake in the region’s infrastructure push. U.S. infrastructure companies, including related service providers, have an opportunity to tap into this dynamic market and grow with it. Along with U.S. officials, they can bring experience setting standards and safeguards that will help Asia connect in a more inclusive and sustainable way. Strategically, the United States has an interest in ensuring that no single entity dominates the Eurasian landmass, where a majority of the world’s people and economic power resides and where unrestrained competition led to global conflict twice during the last century.