China Belt and Road Initiative

Topic: Economics
Words: 1152 Pages: 4


The Chinese government is working to rebuild the silk road through the Belt and Road Initiative (BRI). The initiative is one of the most ambitious programs by China for foreign trade and investment program. The initiative is very broad in terms of scope. The Chinese state banks are part of the initiative as they have already invested approximately 250 billion dollars in various projects within the initiative. Some of the key projects where the banks have invested their money include railway and power plant projects. Since its inception in 2013, the Chinese companies have already signed contracts worth 460 billion dollars in construction due to the initiative in about 170 countries in Europe, Asia, and Africa. All the contracts are financed by the Chinese state’s banks globally (Hillman, 2020). It is expected that when the initiative matures, its investment will be estimated to have risen to 4 trillion dollars, equal to china’s foreign currency reserves.

The transport sector is one of the key sectors that is a major push for the investment and development of the transportation system, especially ones that target to join Europe and Asia. The development of rails, roads, ports, logistics areas and industrial parks are some of the key projects under the initiative, constructed to join Europe and Asia. The china belt and road initiative are not only limited to infrastructural development only but also invests in other sectors, such as manufacturing. Chinese cement manufacturing companies such as Anhui Conch have taken part in the initiative by investing in cement manufacturing by building six large cement plants in Indonesia and Vietnam. Oil and gas exploration is another key aspect of the initiative. For instance, the CITIC bank, one of the major banks in China, has acquired an oil field and asphalt production company in Kazakhstan.

The program’s future seems to be very luminous with the continuous investment by the Chinese government in the initiative. It is projected that the China Belt and Road Initiative’s annual investment will rise to 150 billion dollars, with the Chinese government already pledging about 125 billion dollars to finance these feature projects (Gill, 2017). The initiative has a wider scope covering financial corporations, cultural exchange, and trade, but the infrastructural segment has received much attention.

By providing infrastructural support in terms of loans, there is an expected rise in the number of countries that will join the initiative in the next five years. The current participant in the initiative has more than a third of the global population, meaning the Chinese firms, through the initiative, will be able to expand their operation in this large market with a third of the global economy. This will allow them to compete with their peers from developed countries in these markets. The annual increase in direct foreign investment from the Chinese government is expected to rise with new countries joining the initiative that would need both infrastructural support and financial support.

The Success of the Initiative

The China Belt Road Initiative is considered a successful program. The Chinese government has used the initiative to promote its technical expertise and services. Energy is required for the implementation of the BRI; China is among the countries with a notable contribution to the energy sector. China has invested in solar power cells, advanced wind power, hydroelectric developments, and battery production, commanding 60% of the world’s output (Buckley, Nicholas & Brown, 2018). China has dominated cobalt mining globally, where it controls 62% of the world’s cobalt production (Buckley, Nicholas & Brown, 2018). BRI is successful because of the power grid transmission technology linked to different energy sources. The Chinese state grid has allowed Chinese companies operating abroad to include the Chinese standards in the international ultrahigh voltage standards.

In the digital sector, the imitative is successful in the country’s attempt the big mining data to solve sustainable development challenges which face various countries globally. While implementing key projects within the initiative, such as the construction of green buildings, smart electricity grids within the energy sector, and smart logistic and transport facilities, china has been able to reduce greenhouse emissions, which is also a scope of the initiative.

Through the Initiative, China has provided opportunities to its companies within the telecommunication sector. Concerning the common standards, Chinese companies have been able to build infrastructure for technologies such as the internet of things and other e-commerce platforms (Gong, 2020). This has provided Chinese companies with opportunities to roll out these technologies globally, for instance, the optic fiber built in China and Russia and the satellite programs, which are major GPS competitors (Gong, 2020). Chinese companies such as China Telcom Corporation, China Mobile, and China Unicom are investing heavily in the telecommunication sector and working closely with the equipment providers such as Huawei and ZTE in the 5G areas. The push for a 5G network is because it will be the key driver for the internet of things, autonomous vehicles, and other significant trends.

Feelings of the Participating Countries about the BRI

China has established itself as the single country with the largest trading partners in Africa. China has developed and evolved to become the continent’s biggest creditor, and it holds about 14% of the African continent’s debt (Stevis-Gridneff, 2018). It is estimated that since 2000 China has lent various African countries, through their governments or state agencies, bout 100 billion dollars. Various countries have chosen to be part of the China Belt and Road Initiative. This program has reached African countries, and South American, East Asian countries and other countries in Europe have chosen to be part of the program. Most countries participating in the initiative claim that they do so to be connected to the rest of the world. These countries also insinuate that they will be able to level up their efforts to achieve their industrialization goal through their participation in the initiative. According to Lu et al. (n.d.), the initiative is very important in boosting foreign direct investment through the transportation connectivity part of the program. This can speed up the industrialization process and economic growth, which is a clear benefit to the countries participating in the initiative.


The development of rails, roads, ports, logistics areas and industrial parks are some of the key projects under the initiative. The china belt and road initiative are not only limited to infrastructural development only but also invests in other sectors such as manufacturing, finance, and cultural exchange programs. The initiative, which many participating countries have positively welcomed, has enabled the country in some areas to establish its technical standards as the global default in some fields. Even though China is not the first country to utilize this strategy for business reasons, it has helped the country succeed in various sectors. By developing ultrahigh voltage power lines in the energy sector, China has implemented its local technology in the subsector, which has made the country acquire a global leadership position.


Buckley, T., Nicholas, S., & Brown, M. (2018). China 2017 review: World’s second-biggest economy continues to drive global trends in energy investment.

Gill, I. (2017). Future development reads: China’s Belt and Road initiative. Brookings. Web.

Gong, X. (2020). China’s Belt and Road initiative financing in Southeast Asia. Southeast Asian Affairs, 77-95.

Hillman, J. E. (2020). The imperial overreach of China’s Belt and Road initiative. WSJ. Web.

Lu, H., Rohr, C., Hafner M., Knack, A. (n.d.). Measuring the impact of improving transportation connectivity on trade in the region: China Belt and Road initiative. RAND. Web.

Stevis-Gridneff, M. (2018). More of Africa finds itself in China’s debt. WSJ. Web.

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