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THE BELT & ROAD INITIATIVE: EXAMINING CHINA'S EXPANDING INFLUENCE IN GLOBAL TRADE AND INFRASTRUCTURE

This Article has been written by Arryan Sanjay Yadav, student of KC College, Mumbai.


ABSTRACT

In 2015, for the first time, China's outbound investment was more than its inward investment. A ageing demographic transition, slowing internal migration, and falling returns on physical capital expenditures all harmed China's capacity to compete in low-wage manufactured exports and the related development model in the years leading up to this shift. Thus, in 2013, the Belt and Road Initiative (BRI) was officially introduced in two parts, first in Kazakhstan and then in Indonesia, two different developing nations. This article delves deeper into the economic, geographical, and demographic justifications for each of these potential BRI launch alternatives. Most people believe that China's Belt and Road Initiative (BRI) is meant to aid its own economic growth while also opening up new doors to progress for countries whose economies are just getting started. China's idea of "patient capital," effectively concessional capital or foreign aid, is one way to ease the latter. This is an opportunity for China to further integrate the Renminbi into the global financial system. In order to continuously scope out the design and course of the Belt and Road Initiative (BRI), it is important to draw lessons from China's own experience using foreign aid and economic expansion. As such, this article explains China's potential benefits from the BRI.


KEYWORDS: Belt and Road Initiative, international business policy, BRI projects, complex integrative thinking, international law; Belt and Road Initiative; foreign relations; armed conflict


INTRODUCTION

The Belt and Road Initiative (BRI), often known as the New Silk Road, is a massive Chinese infrastructure initiative. The ambitious set of development and investment plans, initiated by President Xi Jinping in 2013, was initially conceived to connect East Asia and Europe through physical infrastructure. The past decade has seen the project expand to Africa, Oceania, and Latin America, significantly increasing China's economic and political influence around the world.

There is growing criticism in some nations because of the mounting expenses of the projects and because some analysts view them as a worrisome extension of China's emerging influence. The United States and certain Asian countries are worried that China would utilise the BRI to increase its hegemony and military presence in the region. Although President Joe Biden has continued his administration's scepticism of Beijing's policies, the Obama administration has had trouble providing participating states with a more alluring economic agenda[1].


What was the original Silk Road?

During the Han Dynasty's (206 BCE-220 CE) westward expansion, trade routes were established between China and modern-day Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan in Central Asia and between China and modern-day India and Pakistan in the south. Those paths went all the way across the Atlantic Ocean to the European continent.

Central Asia was the epicentre of one of the earliest waves of globalisation, which brought together eastern and western markets, created immense wealth, and mixed cultural and religious traditions. In exchange for gold and other precious metals, ivory products, and glass goods, China acquired valuable goods from the west like as silk, spices, and jade. In the first millennium, the road saw its heyday under the rule of the Roman and Byzantine empires and the Chinese Tang Dynasty (618-907 CE).

However, the Crusades and the Mongol invasions of Central Asia stifled commerce, isolating Central Asian countries economically so that only a small fraction of cross-border trade now takes place within the region. Until the Russian war in Ukraine dispersed remittance-sending migrant labourers, Kyrgyzstan and Tajikistan relied significantly on Russia, notably for remittances, which accounted for approximately one-third of their GDP.

It was 40 years ago on December 13 that Chinese leader Deng Xiaoping gave a speech marking the beginning of the period of "reform and opening" during the closing session of the Communist Party of China's Central Committee Work Conference. According to this plan, starting in the middle of the 1980s, favourable demographics at low levels of per capita income, the development of fixed capital, and the rise of the manufacturing sector focused on exports combined to provide a foundation for the rapid expansion of China's economy. This process lasted for twenty years.

These enabled tens of millions of people to move from working in the rural informal economy to formal industrial and urban jobs, notably in export-oriented industrial sectors. This resulted in skyrocketing levels of international trade and tremendous productivity development (Garnaut, Cai, & Song, 2014). The result was increased foreign exchange and access to advanced foreign technology. The current account surplus reached its all-time high of 10% of gross domestic product (GDP) in 2007, as export-driven development contributed to large external imbalances (Zhang, 2016, page 3). Hundreds of millions of poor Chinese were able to get beyond the poverty line thanks to this method[2].

However, there are still some regions in China where poverty has become entrenched, especially in the country's western and southwestern regions. An important part of Chinese President Xi Jinping's domestic goal is completing the "last mile" of poverty reduction (Xi, 2017). In the same month that President Xi Jinping made his pledge to "exorcise the evil of poverty" (Xinhuanet, 2018), the Central Committee of the Communist Party of China announced their "Guiding Opinions of the Communist Party of China on the Three-Year Action to Win the Fight Against Poverty" (Sina, 2018). These opinions were produced in response to President Xi's vow. The ultimate objective is to build a "xiaokang" ("moderately prosperous") society, which necessitates the complete elimination of poverty by the year 2020 (China Daily, 2018).

The timing of the problem, however, makes it more challenging to end poverty, in particular because recent structural change is diminishing the link between economic growth and poverty reduction in addition to slowing growth (Wei, 2017). This structural shift can be mediated, in part, by demographics and the sectoral allocation of labour supply. China has been in a transitional stage when labour is becoming scarcer and more costly (Garnaut et al., 2014, p. 4; Section 2 herein) for the better part of a decade. This is the Lewis turning point in economics, and it's associated with rising wages and a subsequent loss of competitiveness in industries that rely heavily on human labour. In 2003, China's RCAI for labor-intensive goods hit a high of 4.4 (ibid). Meanwhile, China's extraordinarily capital-intensive growth pattern, particularly in the steel and construction industries, was producing pollution and surplus industrial capacity, while rising public intolerance of pollution, economic inequity, and corruption was causing significant unease among officials.

Consumption, innovation, and overseas investment are becoming increasingly key drivers of China's economy as a result of policy and market pressures (for further information, see Garnaut, Johnston, and Song, 2017). Following a peak of 46% in 2010 (Fang, Song, & Johnston, 2017), the industrial sector's percentage of GDP was on the decline in 2016, hovering around 40%. China's overseas investment has outpaced its incoming investment since 2015 (ibid), and services now account for more than half of GDP. A major change in the composition of China's development drivers could trigger a worldwide reallocation of economic activity and influence the future of globalisation due to the size and scope of China's industrial sector and savings level (Liu & Dunford, 2016)[3].

The potential ramifications are vast. One of these is a change in the trade balance that benefits nations who currently have an abundance of young, cheap workers (see Johnston, 2015). Opportunities arise for these nations as China's industrial output undergoes a progressive upgrade and the country loses its competitive edge in the labor-intensive sector (Johnston, 2018; Mihretu & Llobet, 2017).

China's "Belt and Road Initiative" (BRI) was introduced by President Xi Jinping in two stages into this context in 2013. To begin, in September, he proposed a "Silk Road Economic Belt" in Kazakhstan, and then, in October, he proposed a "Maritime Silk Road" in Indonesia. In December of that year, the BRI was conceived as a platform for inspiring fresh thinking on China's open development and outward investments at the Central Economic Work Conference of the Chinese Communist Party (CCP) (Liu & Dunford, 2016). Previously known in English as the "One Belt One Road" programme (a literal translation of the Chinese word "yidaiyilu"), the "Silk Road Economic Belt" and the "Maritime Silk Road" have been merged into a single project known simply as the BRI.

The Belt and Road Initiative (BRI) places an emphasis on collaboration in five key areas: (a) coordinating development strategies; (b) developing infrastructure and facilities networks; (c) expanding investment and commercial links; (d) bolstering financial cooperation; and (e) deepening social and cultural contacts. Although Xi called it the "Project of the Century" in the middle of 2017 (China Daily, 2017), its ambitions may be less limited than such a list suggests. A European diplomat stationed in Beijing told the SCMP in 2017 that "everyone asks me about OBOR (BRI), but we don't even what it is" due to the ambiguity surrounding the BRI. While many analysts have pointed out the BRI's enormous potential benefits, they have also warned of the substantial dangers of investing in less politically stable emerging nations.

Examining historical tendencies and current objectives in linked sectors of China's economic planning is one way to get a sense of the BRI's shape and trajectory. Aid, trade, and investment are the primary non-financial international economic arteries. Despite being the smallest component, foreign aid nonetheless plays a significant role in the BRI. First, because it serves a dual function by helping countries in need while also opening up new markets to Chinese commerce and investment. Second, the BRI's emphasis on poor nations makes foreign aid an issue that cuts across all five of the aforementioned areas of cooperation. Thus, it may be possible to gain insight into potential future trends in the BRI by better understanding the long-term trends and forces affecting China's foreign aid[4].


ENVIRONMENTAL AND SOCIAL SUSTAINABILITY

The environmental and social sustainability of the Belt and Road Initiative (BRI) is an essential component that must be investigated. The following are the subtopics that are encompassed by these factors to consider: Potential environmental implications related with BRI infrastructure development, including deforestation, habitat damage, and biodiversity loss, are assessed in Environmental implications of Large-Scale Infrastructure Projects. b. An investigation into the influence that BRI projects have had on water resources such as lakes, rivers, and groundwater. b. An analysis of the effects of BRI projects with regard to climate change and greenhouse gas emissions, taking into consideration energy consumption, transportation, and industrial operations. Environmental Concerns and China's Response:

  1. A summary of environmental laws and policies that apply to BRI projects in China.

  2. An investigation into the efforts China is doing to foster environmentally friendly growth and environmentally responsible infrastructure within the context of the BRI.

  3. An analysis of China's participation in global environmental initiatives such as the development of renewable energy technology and the Paris Agreement[5].

  4. An assessment of China's success in incorporating environmental concerns into the development and implementation of BRI projects.

Discussion of the most recent developments in environmental protection technology and methods implemented by BRI projects.

  • An examination of the environmental protection challenges that are now being faced.

  • A study of the difficulties involved in putting environmental protections into place and enforcing them, including problems with governance, accountability, and compliance.

  • A review of the effectiveness of multilateral environmental agreements and international collaboration in resolving environmental concerns raised by BRI projects.

  • Case studies illustrating both effective and ineffective methods of environmental protection implemented inside BRI projects.

  • Resettlement, displacement, and the effects on local populations are some of the social aspects of BRI projects that need to be evaluated.

  • An analysis of social protections and strategies to offset the potential adverse effects on communities, ways of life, and cultural heritage.

  • An analysis of China's attempts to promote social sustainability, including the establishment of local capability, the employment of locals, and community involvement.

  • A discussion regarding the involvement of stakeholders, the participation of the public, and the transparency of decision-making procedures in relation to BRI projects.

One can learn more about the potential environmental effects of BRI projects, China's efforts to solve environmental issues, advancements and difficulties in environmental protection, and the Belt and Road Initiative's promotion of social sustainability by examining these subtopics[6].

Examining historical tendencies and current objectives in linked sectors of China's economic planning is one way to get a sense of the BRI's shape and trajectory. Aid, trade, and investment are the primary non-financial international economic arteries. Despite being the smallest component, foreign aid nonetheless plays a significant role in the BRI. First, because it serves a dual function by helping countries in need while also opening up new markets to Chinese commerce and investment. Second, the BRI's emphasis on poor nations makes foreign aid an issue that cuts across all five of the aforementioned areas of cooperation. Thus, it may be possible to gain insight into potential future trends in the BRI by better understanding the long-term trends and forces affecting China's foreign aid[7].


FINANCIAL AND LEGAL CONSIDERATIONS OR FINANCING MECHANISMS

The Financial and Legal Considerations or Financing Mechanisms of the Belt and Road Initiative (BRI) encompass a multitude of factors that necessitate examination in order to fully comprehend the implications of the project. The following subtopics delve into these considerations:

  1. Overview of Financing Mechanisms:

a. An introduction to the Belt and Road Initiative (BRI) and its financing requirements.

b. Discussion on the financial instruments and mechanisms employed to fund BRI projects.

c. Exploration of the role played by international financial institutions, including the Asian Infrastructure Investment Bank (AIIB) in providing financial support.

d. Examination of other funding sources available for BRI projects, such as bilateral agreements, sovereign wealth funds, and commercial loans.

  1. Role of Chinas Policy Banks:

    1. Introduction to Chinas policy banks: China Development Bank (CDB) and Export Import Bank of China (Exim Bank).

    2. Overview of how these policy banks are involved in financing BRI projects.

    3. Analysis of the policy banks' contribution in terms of providing loans and funding for infrastructure development.

    4. Evaluation of both the benefits and challenges associated with relying on Chinas' policy banks for financing BRI projects.

  2. Implications of Debt Burdens:

    1. In depth examination of potential debt burdens incurred by participating countries through BRI projects.

    2. Analysis focusing on debt sustainability concerning BRI funded projects. As well as their impact on recipient countries' economies.

    3. Evaluation of potential debt risks tied to BRI including concerns surrounding transparency, repayment capacity, and refinancing risks.

    4. Case studies spotlighting examples where countries have encountered difficulties managing their BRI related debt. Through further exploration into these aspects within this framework. One can gain a comprehensive understanding while maintaining respectful language and references throughout our analysis

  3. Sustainability of the Financing Model:

    1. Evaluation of the BRI projects' financing model's long-term viability.

    2. A study of how project funding takes into account economic and environmental sustainability.

    3. Examining the financial model's social and political ramifications.

    4. A discussion of potential changes or substitutes to guarantee long-term funding for BRI projects.

One can obtain a thorough understanding of the financial and legal aspects or financing methods related to the Belt and Road Initiative by looking at these subtopics.


CHANGES IN THE REGION'S BALANCE OF POWER

The Belt and Road Initiative, also known as the BRI, contributes to power transfers in the region. China has been investing heavily and expanding its infrastructure, giving it the potential to threaten the hegemony of other countries and regional organizations.

Trade and Connectivity: The BRI aims to boost infrastructure development and connectivity to encourage greater trade and economic cooperation among the participating countries. This might lead to the formation of new trade blocs or regional economic agreements, which might change the regional dynamics presently in place.

Alliances:

China's investments in the Belt and Road project (BRI) have the potential to deepen its relationships with the countries that are participating in the project, thereby developing deeper political links and partnerships. This gives an opportunity for China to establish new alliances and strengthen existing ones, thereby expanding China's diplomatic sphere of influence.

Response from Countries That Have Historically Been Part of Traditional Alliances It's possible that countries that are members of traditional alliances may voice their concern about China's growing clout as a result of the Belt and Road Initiative (BRI). There's a chance they'll see it as an attack on their authority or an attempt to muscle in on their sphere of influence. This may lead to a reevaluation of existing alliances or the formation of new ones as a means of countering China's rising global importance.

Power Hierarchies in Different Parts of the World:

The Belt and Road Initiative (BRI) has the potential to assist in the reorganization of economic hubs across the world by establishing new trade routes and launching infrastructure development projects. The expansion of China's economy, along with the focus that will be placed on connection by the Belt and Road Initiative (BRI), could result in a shift of economic influence from Western countries to those in Asia. The BRI will place an emphasis on connectivity.

A struggle for global leadership is emerging as a result of China's engagement in the Belt and Road Initiative (BRI), which is posing a threat to the existing international power structures. As a direct consequence of this fact, there is a possibility that well-established nations like the United States and the European Union will confront competition for the leadership and influence positions they currently hold. It is possible that as a consequence of this, the world will become more multipolar, with power being more evenly distributed among a variety of distinct significant actors.

The following are examples of replies and reactions:

Other major countries, such as the United States, Russia, and India, have reacted to China's growing status in the world in a variety of different ways. These countries include the United States of America. Some people consider the Belt and Road Initiative (BRI) as a strategic challenge, and they are concerned about the repercussions it could have for the politics of other countries across the world. They could react by increasing their own regional activities, investing more money into the construction of infrastructure, or coming together to form a coalition in order to combat the threat.

Participating Actors in the Region: The increasing presence of China in the region has elicited a number of responses from the many entities located in the region. Some countries see the Belt and Road Initiative (BRI) as an opportunity for their economies to expand and for the upgrading of their infrastructure, both of which would lead to a tighter working relationship with China. Others may be suspicious or apprehensive about the potential financial burden, environmental concerns, or loss of sovereignty that could be brought on by BRI projects. This could be due to the fact that these issues could be brought on by BRI projects. It's possible that they'll try to find a middle ground in their relationship with China by broadening their network of connections and maintaining their relationships to other powerful countries.

It is imperative that the fact that responses and reactions to China's expanding influence as a result of the BRI might drastically change depending on the individual interests, aims, and historical relationships of each nation or actor involved be brought to people's attention. This is because of the nature of the BRI. Both the geopolitical issues that need to be taken into consideration and the reactions to those factors are complex and diverse; furthermore, they continue to evolve and adapt in tandem with China's Belt and Road Initiative (BRI).


REGIONAL ENERGY INTEGRATION AND COOPERATION

In recent years, a myriad of endeavors have surged to elevate energy integration and collaboration among India's neighboring nations through cross-border energy infrastructure projects and regional initiatives. These avant-garde initiatives strive to foster energy fortification, market amalgamation, and sustainable energy advancement in the region. Behold some extraordinary instances:

South Asian Association for Regional Cooperation (SAARC): SAARC stands as an intergovernmental organism encompassing eight nations in South Asia, including India and its neighboring counterparts such as Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka, and the Maldives. SAARC harbors an unwavering commitment to regional cooperation, including in the energy domain, with the aim of propelling economic upsurge, social advancement, and alleviating poverty in the region.

India-Bangladesh: India and Bangladesh have been zealously collaborating to augment energy cooperation. They have erected cross-border transmission interconnections to enable the seamless exchange of electricity. Pioneering projects like the Baharampur-Bheramara and Surjyamaninagar (Tripura)-Comilla (Bangladesh) interconnections have invigorated the transmission of power between the two nations.

India-Nepal: India and Nepal boast an enduring history of energy collaboration. They have forged alliances on various projects, encompassing the construction of cross-border transmission lines, such as the Dhalkebar-Muzaffarpur transmission line, which facilitates the harmonious exchange of electricity between the two nations. Furthermore, blueprints are underway for the establishment of hydroelectric projects in Nepal with Indian investments to satiate Nepal's burgeoning energy demands.

India-Bhutan: India and Bhutan share an intimate partnership in the energy realm. Bhutan possesses substantial hydropower potential, and India has been instrumental in nurturing hydropower projects in Bhutan. Collaborative endeavors such as the Chukha, Tala, and Punatsangchhu hydropower plants have materialized, ushering in a new era of bilateral cooperation, with the electricity generated being exported to India.

India-Myanmar: India and Myanmar have embarked on an odyssey to explore opportunities for energy cooperation, particularly in the oil and gas sector. Pioneering projects like the India-Myanmar-Thailand Trilateral Highway and the Kaladan Multi-Modal Transit Transport Project aspire to augment connectivity between the nations, paving the way for potential amplification in energy collaboration.

Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC): BIMSTEC emerges as a regional organization encompassing seven nations surrounding the Bay of Bengal, including India, Bangladesh, Nepal, Bhutan, Sri Lanka, Myanmar, and Thailand. BIMSTEC dedicates its efforts to promote regional connectivity and cooperation, including in the energy domain, with the ultimate aim of fostering economic development among its member countries.

These regional energy integration and cooperation initiatives and organizations assume an indispensable role in fostering energy security, market amalgamation, and sustainable energy development among India's neighboring nations. They serve as conduits for the exchange of energy resources, technology, and expertise, engendering mutual benefits and fortifying regional ties.


GEOPOLITICAL TENSIONS IN ENERGY-RICH REGIONS:

Ongoing conflicts and geopolitical tensions in energy-rich regions, such as the Middle East, Eastern Mediterranean, South China Sea, and the Arctic.

Disputes over energy resources, territorial claims, and navigation rights in these regions, impact energy security and regional stability.


ROLE OF RENEWABLE ENERGY IN GEOPOLITICAL RELATIONS:

The growing influence of renewable energy technologies: The adoption of renewable energy sources reduces dependence on fossil fuel-rich countries, altering the geopolitical landscape. This shift can have implications for energy-related alliances, trade relationships, and foreign policy dynamics. Renewable energy projects can serve as platforms for collaboration and investment opportunities between countries.


BELT AND ROAD INITIATIVE FRAMEWORK

Chinese President Xi Jinping introduced the Belt and Road Initiative in 2013. It is a massive infrastructure building initiative. Its goal is to connect China's impoverished regions with the nations that are neighbouring to China. Almost 150 nations across Europe, Asia, the Middle East, Latin America, and Africa are being linked into a commerce network as a primary focus of infrastructure development (Kuo and Kommenda, 2018). You can go one of two ways along this route: Beijing plans to connect China's underdeveloped interior to Europe via Central Asia on land, and the fast-developing nations of ASEAN to Southern China via railways and maritime ports on the water (Cai, 2017).Approximately half of the world's countries are under the Belt and Road's proposed geographic scope. To further foster cooperative economic development and realise shared social prosperity, the BRI has been bundled with mutual advantages to all stakeholders. The "Belt" intersects the "silk road economic belt" at three different places outside of China. Europe may be reached via Central Asia and Russia, West Asia can be reached by the Persian Gulf and the Mediterranean, and China can be reached via Southeast Asia, South Asia, and the Indian Ocean. There are two main paths that make up the "Road" that is the "21st-century Maritime Silk Road." There are two possible routes: the first entails leaving a Chinese port in the South China Sea for the Indian Ocean and Europe, while the second leaves a Chinese port in the South China Sea for the South Pacific and the Americas. This study examines how the ASEAN countries can profit from the BRI. The Association of South East Asian Nations (ASEAN) is made up of 10 countries: Malaysia, Indonesia, Thailand, the Philippines, Singapore, Brunei, Vietnam, Laos, Myanmar, and Cambodia. According to Tao (2015), the three key manifestations of China's endogenous economic demands that led to the creation of BRI are. Quickening the pace of fundamental economic needs comes first. Second, there is always an underlying requirement for robust economic expansion. In addition, you have to "go out" right now. The world community expects a prosperous China to play a major role in global affairs. To investigate whether the China-ASEAN Free Trade Area can further develop bilateral trade, Cheng and Feng (2014) extended the three-stage gravity model. The free trade zone has had positive benefits on import and export between China and ASEAN countries, while having only a little impact on trade transfer to non-ASEAN countries. In an empirical analysis of ASEAN countries using the gravity model, Tan (2015) identified a number of factors that affect the volume of commerce between China and ASEAN.


CHINA’S BELT AND ROAD INITIATIVE

President Xi Jinping of China proposed the Belt and Road Initiative in 2013. The Silk Road, which ran from China to Central Asia, is the subject of the first belt. To connect Southeast Asia, the Middle East, Europe, and the east coast of Africa, "One Road" alludes to a "maritime road" along the coasts of these regions. The idea can be applied to a wide variety of countries. There have been references to 65 countries as being eligible, but Chinese backers of the idea have made it clear that any country interested in joining the project is welcome to do so.

Connecting underdeveloped parts of China to Central and South Asia is another goal of the Belt and Road Initiative. Eighteen western provinces in China have been chosen to take part in the programme[8].

It is expected that a first phase of the Belt and Road Initiative would require Chinese expenditure of around 240 billion US dollars. The actual cost of the project will, of course, vary depending on how many nations are involved and which industries are included. Because of how dynamic the Belt and Road plan is, investment costs and funding needs will be subject to regular review and adjustment.


How China stands to gain from the Belt and Road Initiative

Potential political and economic gains for China could be substantial thanks to the BRI. It has been noted in official policy communiques that China has been expanding its export markets, advocating for the Renminbi (RMB) as a worldwide currency, and doing away with trade frictions like tariffs and transportation costs.

Transport times and costs can also be reduced by investing in and connecting to neighbouring countries' hard infrastructure. By developing a "soft infrastructure" with trading partners, more products can be exchanged with fewer restrictions. Bonds issued in RMB to fund these infrastructure projects will do double duty by increasing the currency's adoption in global financial hubs. Overland commercial connectivity between China and Central Asia will especially benefit the country's poorer western provinces.

By accepting Chinese investment, a country may feel obligated to hire Chinese firms to oversee its infrastructure, giving Beijing a measure of control over vital services. From Beijing, diversifying China's transport network for essential natural resources like oil and gas through investments in key areas like Gwadar could help the nation become less dependent on trade routes like the Strait of Malacca, through which China currently imports a significant amount of its oil and gas.

There must to be tangible gains for our partner nations as well. If their infrastructure needs are met, these countries can develop more quickly, which could result in the production of new jobs and stable economic growth. The World Bank and other organisations that may provide funding for infrastructure projects may impose conditions on their loans that some countries may view as an infringement on their authority. Some examples of such constraints are requirements that governments adhere to a certain expenditure cap or take steps to combat corruption. In contrast, recipient countries are less likely to be required to comply with such criteria in order to receive Chinese investment[9].


Long-term feasibility of the Belt and Road Initiative

For the BRI to be successful, China will have to overcome a number of challenges. Partner countries may respond coolly to investment offers if they suspect Chinese intentions are not pure. This has happened before with Chinese SOEs' unconnected BRI-related abroad investments. So far, Australia has resisted efforts to openly link its national infrastructure fund with the BRI, and the country has shown reluctance to authorise specific investments by Chinese state firms. Australia's capital city of Canberra rejected two energy and agriculture investment proposals from Chinese state-owned enterprises (SOEs) in 2016 on the grounds of national interest and security.

After initially welcoming Chinese investment with open arms, Myanmar has shown signs of reluctance. Construction on the Myitsone dam, one of China's largest investment projects in Myanmar, was delayed in 2011 over fears of expanding Chinese dominance and environmental degradation. Despite the ongoing uncertainty, China remained Myanmar's top investor in 2018, pouring over $15 billion into various business endeavours despite the country's political and economic instability.

India has voiced serious reservations about joining the BRI. The government of New Delhi decided not to participate in the Belt and Road Forums in 2017 and 2019. Doubts about the BRI are widespread, but the construction of CPEC infrastructure across contested Kashmir is a major source of unease.

The issue is further complicated by economic factors. It is expected that BRI infrastructure investments in Central Asia, Pakistan, and Myanmar may incur losses due to low utilisation, which could have unintended consequences. The largest Chinese investment in Kyrgyzstan, the Kara-Balta oil refinery, has been struggling with overcapacity in recent years. The $9.9 billion Thai-Chinese high-speed railway project has already been delayed for a very long time as officials there try to work out the problems of financing and negotiations.

While many BRI projects won't see returns for years or even decades, they'll nevertheless eat up resources that could be put to better use elsewhere in the meanwhile. The southern Chinese port of Qinzhou, intended to serve as a major gateway for trade with Southeast Asia, has instead lagged far behind its potential in terms of actual traffic five years after it opened[10].

Despite these challenges, it's vital to keep in mind that BRI is a long-term strategy. It has a lot of projects in the planning stages that won't be finished for a long time. Until recently, investment offers from China have been met with scepticism. However, this may change if China is able to successfully complete a number of high-profile projects. This highlights the significance of successful initial project iterations. It may take some time to see the full effects of the BRI, but it has the potential to improve regional economic and political connections. China may gain more power and sway over other nations as a result of this increased involvement in the international economic system[11].

CONCLUSION

China can easily learn from its mistakes and reclaim lost momentum if the BRI has any missteps. This is due to the fact that no other government comes close to matching their all-encompassing approach to politics, notwithstanding its flaws. Collaboration between government agencies, CPCs, and other sectors, such as the academic and research communities, is essential to the success of such a strategy. The Chinese federal, provincial, and municipal governments have invested heavily in the latter for decades to cultivate linguistic, cultural, political, and economic understanding of different regions throughout the world. In particular, Chinese provinces that are bordered by other countries have developed a wealth of local knowledge about those countries, knowledge on which the central government has relied and used to advance the BRI.

It could be argued that the BRI was merely an expansion of previous initiatives, such as the Bangladesh-China-India-Myanmar Regional Economic Forum (BCIM), which was launched in 1999 as a Yunnan provincial government initiative, and the BCIM Economic Corridor, which was proposed in May 2013 (MEA, GoI 2013). Despite the fact that the BCIM has had its fair share of issues (some of which foreshadow those that are now being encountered by the BRI as well), what stands out is the degree of autonomy enjoyed by sub-national entities in China, which is not fully reproduced in India despite the latter's status as a federal state.

Therefore, China's BRI forces India to reevaluate its whole foreign policy, including its goals, strategies, and structures, as well as its administrative systems, center-state interactions included. India has plenty of ideas, but it lacks the means and expertise to implement them. Some of these can be fixed by improving the coordination and synergy between the ministries responsible for implementing international development programmes. Some argue for a mental shift in which the federal government and its ministries, for instance, are more open to inputs and expertise from the outside, including from the states, the military, the academic and think-tank communities.

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