Since being unveiled in 2013, the Belt and Road Initiative (BRI) has become the signature foreign policy project of Chinese President Xi Jinping. The initiative demonstrates China’s growing ambitions at home and abroad and was officially inscribed in the Chinese constitution during the 19th Party Congress, the same congress during which Xi proclaimed a “new era” and the “great rejuvenation of the Chinese nation.”1 It is symbolic of China’s more self-confident foreign policy and departure from the low-profile strategy of “hide and bide” that long characterized Beijing’s global engagement.
The BRI now covers over seventy countries across Asia, Europe, Africa, Latin America, and Oceania. Future plans are even more ambitious, with planned expansion into the Arctic, cyberspace, and even outer space. The initiative’s scale and ambition have garnered immense attention, capturing headlines around the world. Specialized institutes, publications, consultancies, and investment firms seeking to analyze and capitalize on the BRI have sprung up at an astonishing rate.
But despite the BRI’s prevalence in discussions of China’s global engagement, many experts and policymakers are divided on how to interpret it. Is it a global strategy or just an interregional initiative? Are there boundaries to its expansion? How can countries and international companies participate in its growth and development?
Increased attention has also led to heightened scrutiny of the BRI. New questions about the initiative’s transparency and sustainability have arisen as BRI projects have matured. Countries are increasingly concerned that China’s soft power push through the BRI might soon transform into hard power. In China, some complain that the country has overreached and expanded the initiative too quickly, ignoring domestic problems in favor of overseas development and business opportunities.
These questions and concerns all bear directly on the initiative’s future. This working paper brings together perspectives from scholars across three different research centers to examine some of the most pressing issues surrounding the BRI. The aim is to shed light on differing views and to identify areas of consensus and divergence on major issues surrounding the BRI, summarized in the joint conclusion.
Paul Haenle from the Carnegie–Tsinghua Center for Global Policy examines the outlook from the United States. Dmitri Trenin and Alexander Gabuev from the Carnegie Moscow Center provide a Russian interpretation. Feng Yujun and Ma Bin from the Center for Russia and Central Asia Studies at Fudan University explain China’s perspective on the BRI.
The paper is a product of numerous discussions, consultations, and workshops held between the contributing scholars in Beijing. As such, it is not only a statement of each country’s perspective but also a reflection of the collaborative process between the three centers and an attempt to constructively engage multiple perspectives. This approach has allowed the paper to both identify areas of common interest and possible cooperation, as well as shed light on areas of disagreement that require further work.
Recognizing Positives, Addressing Shortcomings: A U.S. Perspective
The Belt and Road Initiative is the signature foreign policy project of the Xi Jinping era. It is symbolic of China’s more assertive foreign policy and departure from the strategy of “hide and bide” that long characterized Beijing’s global engagement. China points to the BRI as proof that it has taken up the mantle of responsibility by playing a substantial role in providing public goods like infrastructure and promoting global connectivity. This messaging is part of a larger push by China to portray itself as a “responsible stakeholder.” While there is little doubt that China has become a stakeholder in the international system, however, it could do more to fully take a responsible approach. This disconnect is particularly visible in the BRI.
Beijing should be commended for its role in renewing interest on the need for large-scale investment in infrastructure and connectivity around the world. The BRI is impressive in its envisioned scale and reach. But China’s approach and interests in pursuing the BRI have come under increased criticism from the United States, other Western developed nations, and even developing countries along the BRI for lapses in transparency, economic sustainability, and sound quality. These concerns are compounded by anxieties that the BRI has underlying strategic motivations with the potential to alter the geopolitical landscape and global governance standards of the international community.
While the United States should not be opposed to the idea of large infrastructure development as promoted through the BRI, many in Washington view the initiative with suspicion due to the consequences of both its failures and successes. This has been complicated by Beijing’s poor messaging. The danger of this is clear. If experts and policymakers in Washington come to a consensus that the United States should oppose the initiative, it will become just one more problem in an increasingly competitive and contentious bilateral relationship.
The challenge for the United States will be to address the clear shortcomings of the initiative, while also recognizing its positive impacts and leaving the door open for future cooperation.
Many observers paint the BRI exclusively as a Chinese geopolitical ploy for world domination or a manifestation of “predatory economics,” in former U.S. secretary of state Rex Tillerson’s words.2 Yet the reality is that the initiative does not completely clash with U.S. interests, and may even in certain cases support them.
There is nothing inherently wrong about infrastructure investment or promoting global connectivity in the developing world. Indeed, the United States has an interest in supporting both of these goals. If Washington is to form a coherent response to the BRI, it must acknowledge where the initiative may align with U.S. interests.
The United States must also recognize that the BRI has taken off so quickly not just because it is a priority for Xi Jinping but also because there is a genuine demand for what China offers. According to the Asian Development Bank, Asia alone requires $26 trillion in infrastructure investment by 2030 to sustain current growth rates.3 In other regions where the BRI is active, such as Latin America and Africa, lack of adequate infrastructure is one of the single largest hurdles for growth and development, according to the International Monetary Fund.4 Given the scale of world infrastructure development needs, the BRI is just a drop in the bucket, yet it also dwarfs what anyone else is doing to meet the challenge.
Through the BRI, China has taken a comprehensive approach to development and engagement with many countries signed on to the initiative. For example, the China Government Scholarship Council has created new scholarship and grant programs for young scholars from BRI countries. These programs assist students in entering undergraduate, graduate, and language programs at China’s top universities.5 Since the BRI was implemented, the number of Pakistani students in China has risen from 5,000 in 2013 to 22,000 in 2018.6 During this year’s Forum on China-Africa Cooperation, Beijing increased investment devoted to vocational training and capacity building.7
Moreover, China has focused much of its attention on emerging countries and regions where Western investment is noticeably absent. Western observers tend to focus on big-ticket projects in large countries, but the BRI’s greatest successes have arguably been smaller-scale but highly targeted investments in developing countries. Because these countries often lack necessary infrastructure, the marginal benefit of each yuan spent is greater than in more developed areas. A new road in Tajikistan or a bridge in Laos may not attract much outside attention, but it goes far in supporting local economies and promoting connectivity.
This doesn’t just ensure that investment goes further; it also amplifies Chinese influence. When China is the only country taking an active interest, countries along the Belt and Road are more willing to accept whatever terms Beijing presents. As Pakistan’s former commerce minister Khurram Dastgir Khan put it: “China is the only game in town.”8
Washington also has legitimate concerns about the BRI. Too often, Belt and Road projects have been prone to corruption while severely lacking in economic sustainability, regulatory transparency, and good governance. Together, these deficits lead to projects that threaten sovereignty, export sub-standard norms and practices, and cause concerns over the initiative’s geostrategic implications. These sentiments have been spelled out in a number of speeches delivered by senior members of U.S. President Donald Trump’s administration, including Vice President Mike Pence and Secretary of State Mike Pompeo. If China does nothing to address them, it will be difficult for third-party countries like the United States to view the BRI with anything but suspicion, rather than as an opportunity for collaboration.
Debt and Sustainability
A major factor in this is the debate surrounding the claims that China engages in debt-trap diplomacy through the BRI, ensnaring developing countries with debt dependence and then translating that dependence into geopolitical influence. The Center for Global Development classifies eight countries as having a “particular risk of debt distress” as a result of their involvement in China’s BRI.9 China’s actions in Sri Lanka, Pakistan, and Malaysia are central to the debt trap debates. China acquired ninety-nine years of operating rights for the Hambantota Port in southern Sri Lanka after costs for the project spiraled out of control, forcing Colombo to give up control of the port in return for a Chinese bailout. In Pakistan, a financial crisis has fueled opposition to projects from the China-Pakistan Economic Corridor (CPEC), a major spur of the Belt and Road. The debt-trap argument gained further credence after Malaysian Prime Minister Mahathir Mohamed canceled $23 billion in BRI projects and warned China against falling prey to “a new version of colonialism.”10
Even for those not inclined to view the BRI as a Trojan horse for Chinese influence or a reincarnation of nineteenth-century-style imperialism, this sustainability gap is a major cause for concern regarding Belt and Road projects. China argues that countries that cannot assume the debt burden of large-scale infrastructure projects should not accept such projects in the first place. However, Chinese companies also have a responsibility to conduct appropriate risk and business viability studies ahead of time to ensure recipient countries are likely to repay their debt obligations and are capable of doing so. Given the complex business and political climates of many developing countries where these projects take place, the difficulty in conducting the thorough analysis needed is often amplified. Even with the most scrupulous preparation, no project’s success can be fully guaranteed, but the rising number of countries reporting major debt struggles related to BRI projects indicate a need for Chinese companies to strengthen their project implementation process. Part of improving this surrounds increasing project transparency.
Transparency and Foreign Participation
The lack of transparency surrounding the initiative has been one of the largest sources of U.S. objections to the BRI’s implementation. Opacity makes it difficult for foreign firms to become involved in BRI-related projects until they are already in motion, and it may also create fertile conditions for corruption. These concerns are not specific to the BRI and are also reflected in the broader ongoing U.S.-China trade and economic disputes over fairness and reciprocity for U.S. firms operating in China.
China continues to encourage outside investment to help overcome the massive deficit of funding needed to complete its vision, but there is a disconnect between those looking to participate and actual opportunities. Low standards, difficulties competing in the procurement and bidding process, and riskiness of investments are further obstacles to joining. The confluence of complications lend credence to existing perceptions that Belt and Road is a “made in China, made for China” initiative, as Brian Hook, the State Department Director of Policy Planning, described it.11
Lack of transparency feeds into concerns that BRI projects may encourage poor governance and act as a magnet for corruption. Many of the countries along the Belt and Road already rank among the world’s most corrupt, per Transparency International.12 The opaque nature of BRI projects makes them a highly fertile environment for embezzlement and mismanagement. Under such conditions, political leaders in BRI countries may view Chinese-backed projects as a win-win. Leaders get to claim that they are bringing development while also embezzling funds through kickbacks and shady financial transactions.
Indeed, there have already been several high-profile examples of BRI-related corruption. In Kyrgyzstan, the failure of a Chinese-built power plant has led to the arrest of two former prime ministers accused of receiving kickbacks from the Chinese company in charge of construction.13 In Malaysia, the ongoing 1MDB scandal led to the cancellation of two major BRI-related pipeline projects after it emerged that funds provided by the Export-Import Bank of China were embezzled by a company linked to former prime minister Najib Razak.14
Geopolitics and Global Governance
As long as opacity is the norm in BRI projects, it will be difficult for the United States and other like-minded countries to view the initiative in a positive light. Not only does it foster corruption and exacerbate the debt woes of developing countries, the lack of transparency also fuels suspicions that Belt and Road works as a Trojan horse for Chinese influence. China religiously repeats that it “has no geopolitical calculations” for the BRI.15 However, the initiative’s scale means that it necessarily has geopolitical implications. When this is combined with a lack of transparency, China’s claims of “win-win cooperation” and a “community of common destiny” seem disingenuous at best, and at worst a cover to hide the true intentions of the initiative.
This is especially true when the BRI is seen to indirectly or directly lead to the promotion of values that are inconsistent with those of the current global order. Recent instances in which Greece and Hungary withheld from criticizing Beijing for human rights abuses or illegal claims in the South China Sea illustrate such concerns. And while discussions of Beijing exporting a “China model” tend to exaggerate Chinese intentions to leverage the BRI as a means to subvert the international order, examples such as these, as well as Beijing’s growing influence in Europe through the 16+1 initiative (a Chinese-led forum through which it engages with Central and Eastern European countries), leave outside observers increasingly suspicious.
Similarly, the BRI’s Digital Silk Road component has served as a conduit for the export of Chinese privacy and surveillance technology. This includes the use of facial recognition software in Zimbabwe,16 social credit–like systems in Venezuela,17 cybersecurity laws in Uganda and Tanzania,18 and a great firewall in Russia.19
A number of BRI projects are in strategic locations that suggest a geopolitical calculation. The Strait of Malacca, a high-traffic trade route that has been a source of tension between Malaysia and neighboring Singapore, has three BRI ports planned that will provide direct access to the route.20 Although all ports are planned for commercial rather than military uses, the strategic implications of Chinese-funded ports in all of these disputed locations is enough to worry some that China’s presence in the region will grow beyond commercial ports alone.
In an environment of increasing tensions between the United States and China, it is not surprising that the more skeptical observers in Washington assume the BRI to be a strategy aimed at displacing the United States as the world’s dominant power and cementing China’s rise.
U.S. policymakers must not let the BRI’s conspicuous failures obscure its successes. Despite myriad concerns, knee-jerk opposition to the BRI would be counterproductive.
First, such a response would unnecessarily heighten tensions between the United States and China and would reinforce Chinese perceptions that the United States seeks to contain China, a view that already holds strong currency in Beijing. Second, it would only exacerbate existing concerns about the BRI. If China remains the only option in countries along the Belt and Road, they are far more likely to take Beijing’s terms without question. Third, it would limit U.S. ability to push the BRI in a positive direction by removing the United States from conversations surrounding the initiative. If China views the United States as reflexively opposed to its proposals, it is far less likely to take seriously the United States’ legitimate concerns about the initiative.
Both the United States and China can learn lessons from the Asian Infrastructure Investment Bank (AIIB), a Chinese-led multilateral development bank that the United States initially opposed. When Beijing first proposed the institution, the Chinese concept did not appear committed to international best practices and high standards. U.S. policymakers were skeptical of the organization in its original form and, as a result, tried to discourage allies and partners from joining the bank. In the end, the United States failed to convince its partners to stay out of the grouping, which exposed the limits of U.S. influence vis-à-vis China, limited its ability to further influence the bank, and left Washington isolated. Initial U.S. pushback may have had some positive impact, however, as by all accounts the bank has demonstrated itself to be a professional institution. China’s willingness to work with a broad set of both developed and developing nations (by the time of the AIIB’s official launch fifty-seven countries had joined, including Germany, the United Kingdom, and France)21 to incorporate international best practices for the AIIB has also helped ensure the bank’s transformation into a high standards institution like it is today. Under the leadership of Jin Liqun, the institution has developed a reputation as a competent multilateral development bank with legitimate aims to improve social and economic development across Asia.
For Beijing, the lesson is obvious. It should seek to transfer the successes of AIIB, including appointing an accessible and transparent leader able to help critics understand the failures of the BRI, and promote its successes. For U.S. policymakers, it should be clear that if they want to address concerns about the BRI, coming out against it would only limit Washington’s ability to constructively engage with China on issues related to the BRI and global governance.
It has now been more than five years since Xi Jinping first announced the BRI. In many cases, the BRI has delivered positive results for developing countries, and China ought to be commended for shedding light on the need for increased investment in infrastructure and connectivity around the world. However, from the U.S. perspective, BRI projects all too often fail to demonstrate a commitment to transparency, equity, sustainability, and good governance. Without these features, in an environment of increasing tension between China and the United States, experts and policymakers in Washington are more likely to view the BRI with suspicion and even hostility. Indeed, such views are already prevalent in the United States.
Any coherent policy approach to the BRI must respond to these concerns without allowing them to obscure the areas clearly in line with U.S. interests. The challenge for the United States will be to develop a proactive strategy toward the BRI that recognizes its positive impacts, mitigates its negative aspects, and simultaneously promotes U.S. interests. Yet Washington’s perspective on the BRI will depend not just on the political environment in the United States, but also on what China does to learn and adapt from the initiative’s shortcomings. The United States and likeminded countries will continue to hold negative views of the BRI if Beijing fails to make the project more transparent, more equitable, and more sustainable. If, however, China demonstrates sincere efforts to learn and adapt and to implement standards that promote transparency, equity, and sustainability, it could generate more positive impacts and move China toward a more responsible model of development.
Russia’s Evolving Stance on the Belt and Road Initiative
Russia does not see itself in competition with China for global primacy. The two countries have achieved an advanced degree of partnership built on a range of shared interests, compatible worldviews, and mutual empathy. This kind of entente allows Moscow and Beijing to keep the relationship on an even keel and successfully manage the growing asymmetries in power and competing interests.22 This approach explains the Kremlin’s handling of the BRI: Moscow has managed to use the Chinese initiative to attract investment to Russia and boost the country’s transit potential in the China–European Union transcontinental logistics network, while agreeing with Beijing to hedge against elements of BRI that could damage Russian national interests.
Moscow’s General Perspective on the BRI
China is Russia’s biggest trading partner, although this is not true the other way around. In 2018, the bilateral trade volume exceeded $100 billion for the first time.23 During the same year, Russia tripled the renminbi share of its currency reserves to almost 15 percent—ten times the average for global central banks.24 Amid its confrontation with the United States, Russia has come to rely more on China.25 Yet, it does not want to fall under China’s sway. Moscow’s main objective is to structure a productive relationship with its neighbor while not becoming overly dependent on China. This is also how Moscow views Beijing’s Belt and Road Initiative.
In the Russian assessment, the BRI is a convenient catchall for various Chinese economic activities abroad that should serve as a major element of the foreign policy legacy of President Xi Jinping. It is also a useful label for local Chinese officials as they report to Beijing on their own achievements, in an effort to ingratiate themselves with the Communist Party’s central leadership. Thus, the BRI is essentially driven by economic factors and domestic politics but is instrumental for achieving China’s longer-term foreign policy objectives.
Russians appreciate that the BRI marks a turning point in China’s foreign relations, for it symbolizes Beijing embarking on a more assertive course abroad.26 China’s current goal appears to be attaining the position of a full-fledged global power. Beijing’s economic and financial might and its increasing technological prowess are the main instruments for achieving this goal. The BRI is shorthand for that goal. For Russians, China’s passage from self-imposed restraint to more assertive behavior is only natural for a country with China’s current economic, technological, and military might. Thus, the BRI suggests that China has embarked on the path to gaining geopolitical, not just geoeconomic, clout.
Evolution of Russian Thinking About the BRI
This approach, now widely shared among the Russian officialdom and expert community, did not emerge instantly. In 2013, as the BRI was unveiled by Xi in Astana, Kazakhstan, the Kremlin looked on with uncertainty and a high degree of suspicion. As Russia’s relations with the West deteriorated in 2014 to the point of Western sanctions on Russia, Moscow began seeking ways to boost its partnership with Beijing and turn its relationship with China into an alternative to its relationship with Europe for capital, technologies, and market opportunities. This necessitated a major reassessment of the risks of close partnership with China in energy trade, arms sales, and other areas, including the BRI. Only in spring 2015 did the Kremlin come up with a new, more confident approach to the BRI, shaped by a better understanding of the Chinese initiative and the tectonic shifts in Russia’s relations with the West.
The new approach was cemented in a declaration signed by Presidents Vladimir Putin and Xi Jinping at the Kremlin on May 8, 2015.27 Putin appreciated the importance of the BRI’s international acceptance for Xi’s domestic political standing, and understood the significance that Beijing attaches to verbal support of its policy initiative by leaders of other major powers. In that regard, Russia and Putin occupy a unique position. Moscow understands that despite the growing power asymmetry between Russia and China, it still holds important cards.
Opportunities and Risks
Russia sees China’s robust rise as a relative decline of U.S. global dominance. This trend aligns with what Moscow regards as the right global distribution of power, that is, a multipolar structure. Russia traditionally abhors any country’s global hegemony and finds its interests better served within a less centralized system, so this is a welcome development. A strong partnership with China on global issues is a major foreign policy asset, which the Kremlin treasures.
Russia, however, has equally little tolerance for regional hegemony. The BRI may see China become too dominant on the continent it shares with Russia—and many others—Eurasia. With China’s U.S. relations currently strained, and the European Union’s (EU) suspicions of some Chinese practices and their ultimate goals, Eurasia has emerged, alongside Africa, as the primary focus of Beijing’s efforts. Moscow’s main objective in its relations with China is to use the BRI and other Chinese-originated projects to help develop Russia’s economy, without at the same time inviting Beijing to exercise undue influence on Moscow’s policies. So far, the Russians have concluded that the BRI offers them some opportunities, and the risks involved are manageable.
First of all, Moscow regards Russia’s geographic position as very attractive for linking Eurasia’s two economic powerhouses: the European Union and East Asia. The connectivity dimension of the BRI, which seeks to improve land-based transportation links between the EU and China, is naturally aligned with Moscow’s desire to unlock its transit potential in Eurasia. Of all the overland pathways between western China and Europe, the one through Russia is the shortest. Moreover, the Eurasian Economic Union (EEU) of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia allows cargo to pass through just two customs posts en route from Xinjiang to the EU’s doorstep in Poland, Finland, or the Baltic states. Thanks to policy incentives provided by China, this route is now booming, with the volume of cargo transit growing by double digits every year since 2015. In the first ten months of 2018 alone, the volume of goods transported between China and Europe via Russia grew by 23 percent to 323,000 TEU (twenty-foot equivalent unit, a measure of ship cargo).28
So far, this trade is using existing railroads and highways. Moscow and Beijing are discussing projects for upgrading and expanding existing transportation links, including a high-speed rail connection between Moscow and Kazan with possible expansion to Europe and China, a highway from the Kazakhstan-Russia border to Europe, and several smaller projects to address existing bottlenecks.29 For Russia, upgrading the Trans-Siberian Railway is also a major priority, but it is of less interest to China. At the same time, Moscow has realized that a trans-Eurasian route from China to Europe via Kazakhstan and Russia is not a challenge to the Trans-Siberian Railway since these two routes target two different cargo bases in different regions of Asia.
Beijing is also interested in developing infrastructure along the Northern Sea Route that passes through the Arctic along the Siberian coast. For Moscow, opening the route is both a major economic opportunity and a security challenge, and it is likely to proceed with some caution. So far Moscow has accepted Beijing as its principle partner in developing the Arctic. This is more out of necessity than choice. Many economic activities that Russia wants to pursue in the region are subject to Western sanctions.
One example of Sino-Russian cooperation that is directly linked to the BRI is Chinese participation in Yamal LNG, the first liquefied natural gas (LNG) project in Russia above the Arctic Circle. In 2015, the Silk Road Fund (SRF), a special purpose vehicle created by Beijing to finance BRI projects, was able to acquire a 9.9 percent stake in Yamal LNG.30 Beijing later helped it secure a $12 billion loan from China Export-Import Bank and China Development Bank.31 The China National Petroleum Corporation (CNPC), China’s largest state-owned enterprise in the energy field, already had a 20 percent stake in Yamal LNG,32 bringing Beijing’s total share in this strategic project to 29.9 percent. Significantly, Yamal LNG is under U.S. sanctions, since one of its Russian shareholders, Gennady Timchenko, was put on the U.S. Treasury’s special designated nationals (SDN) list, and the legal entity, Novatek, is included in the sectorial sanctions identification list. Without Chinese loans and equity financing provided through the BRI, Russia would have been unlikely to complete this project, which Putin views as one of his strategic priorities.
Another example of Russia using BRI-related Chinese financial institutions to go round Western sanctions and attract investment to key projects is the SRF’s decision in 2016 to acquire 10 percent in Sibur,33 Russia’s largest petrochemical company. This built on Chinese petrochemical giant Sinopec’s previous acquisition of 10 percent of Sibur.34 In Sibur’s case, two of its shareholders, Gennady Timchenko and Kirill Shamalov, are on the SDN list, and both are close to Putin.
Outside of the high profile deals that were blessed by the top leaders of Russia and China, many smaller investment projects in Russia that lack powerful political backing struggle to attract Chinese investment. This causes some frustration among Russian private businesspeople about the opportunities provided by the BRI. However, the Russian government is fully aware that the low rate of Chinese investment in Russia is caused by the structural problems of the Russian economy and resultant lack of trust by Chinese businesses. The government views the BRI as a good framework to address at least the latter issue.35
Harmonization of the BRI and the Eurasian Economic Union
Apart from Russia-specific projects, Moscow is mostly focused on those BRI activities that involve its neighbors—those that used to be part of the Russian Empire and the Soviet Union. Several of these countries belong to the EEU, Russia’s own integration initiative that has embraced Kazakhstan and Kyrgyzstan in Central Asia, Armenia in the South Caucasus, and Belarus in Eastern Europe.
Rather than joining the BRI, Moscow has proposed harmonizing it with the EEU.36 The idea is to avoid a clash of interests with Beijing in the former Soviet republics. Essentially, as China expands economically in Central Asia, it would not challenge Russia’s preeminent position in the military-security domain. Although China is testing the waters in the security field,37 and has built a measure of political influence in the region, the formula generally works, for now. Central Asian countries, once eager to become fully independent from Russia, have become wary of Chinese ambitions and seek to strike a balance between their two big neighbors.38
Moscow is trying to woo Chinese investment into logistics networks that pass through EEU territory. This area of cooperation between China and the EEU is expanding rapidly, as demonstrated by the growth of cargo volumes. Another axis of Russia’s efforts has been coordinating investment projects that EEU countries pitch to Chinese investors under the BRI brand. This has been less successful so far, in large part due to internal competition among EEU member states and some communication issues between national governments and the Eurasian Economic Commission (EEC), the EEU’s supranational regulator.
One part of the BRI agenda that Russia and its partners in the EEU countries are putting on hold is a free trade area with China. Protectionist sentiments in the EEU are strong, and Moscow is joined by other EEU capitals in its concerns that a deep and comprehensive trade deal with China could pose a threat to local manufacturing. Beijing is ambivalent about these concerns and is neither pushing for a broad deal with the EEU nor seeking bilateral deals with EEU member states that would jeopardize the union from within and undermine the broader Sino-Russian understanding in Central Asia. In May 2018, the Chinese government and the EEC signed a cooperation agreement that serves as a road map for future talks on trade facilitation and liberalization.39
Russia’s Broader Response to the BRI: Further Diversification of Economic Ties With Asia
Russians watch Chinese activities in other parts of Eurasia, from Pakistan to Poland, to understand the scope of Beijing’s ambitions and its modus operandi as a global player. Moscow’s confrontation with Washington and its estrangement from the EU will last many years. During that period, China will be the major economic and strategic partner for Russia. The Kremlin, however, does not want to be solely reliant on China.
Beijing’s own activism stimulates the Kremlin to pursue a more diversified foreign economic policy in Asia. Moscow is currently involved in intense negotiations with Tokyo on a peace treaty and the accompanying territorial settlement,40 which, if achieved, would transform the Russo-Japanese relationship from being distant neighbors to close ones. Russia seeks to expand economic ties with its long-standing geopolitical partner India, and do more business with South Korea. Relations with countries in the Association of Southeast Asian Nations (ASEAN) are also being energized. At this point, these are mostly intentions and hopes, but they indicate Russia’s desire to become an active economic player.
Similar to its pragmatic approach to Chinese money provided through the BRI, Russia is combining engagement and hedging when it comes to the realm of symbols and ideas. As already noted, the Kremlin made it clear from the outset that Russia will engage with China on the BRI, rather than joining the initiative as one of its many partners. To strengthen that symbolic parity with Beijing even further, Moscow has put forward an idea of the Eurasian Economic Partnership (EEP) to include the EEU, China, and even ASEAN countries. This concept was promoted by Putin on many international platforms, including the BRI summit in Beijing in May 2017.41 To Moscow, BRI-EEU engagement could be a stepping stone to the EEP, an even bigger and a more ambitious concept—the one that Moscow is trying to promote. The Russian leadership is intentionally vague on what EEP actually means. Its main purpose appears to be to help Russia maintain symbolic parity with China when it comes to promoting a model of economic integration for the Eurasian landmass.
In sum, Russia’s attitude toward the BRI is generally positive. It is looked upon as an opportunity laden with manageable risks. Russia is far less preoccupied with issues of global governance, as applied to the BRI, than with the initiative’s real impact on Russia itself and its post-Soviet neighborhood. There, Moscow is focused on finding a model of engagement that, while benefiting Russia economically, would protect Russia’s national sovereignty and its security interests. Russians also realize that the BRI is a political project geared to bolster the stature of President Xi Jinping.42 They are willing to play along, conscious that the Putin-Xi relationship is the key element of the Russo-Chinese partnership. At the same time, the Kremlin engages in symbolism to send the message—including to its friends in Zhongnanhai—that Russia is determined to be an equal partner.
The Belt and Road Initiative: China’s Vision for Global Connectivity
The Belt and Road Initiative (BRI) has faced great concern from the international community since it was proposed. On the one hand, many countries and international organizations have strong hopes for the BRI, and more than 100 countries and international organizations have signed at least 170 cooperation agreements with China. On the other hand, there are many doubts and criticisms about the initiative’s details, goals, influences, and prospects, something that China had not expected.
The five-year project has had a huge impact in the countries and regions along the BRI, but it is still developing and changing. It is constantly adjusting based on previous experiences and lessons to promote an inclusive and balanced global governance system.
How China Positions the BRI
The BRI is the general foundation for China’s opening and economic cooperation policy. China’s positioning of the BRI mainly includes the following aspects.
The BRI is a grand economic vision that promotes the development of China’s underdeveloped regions and expands its policy of opening to Eurasia and Europe
The Central Committee of the Communist Party of China clearly stated in 2013 that it is necessary to “accelerate the construction of infrastructure connecting China with neighboring countries and regions, and work hard to build a Silk Road Economic Belt and a Maritime Silk Road, so as to form a new pattern of all-round opening.”43 The BRI is an important part of China’s reform and a means through which to accelerate its development. The coastal areas experienced rapid development for more than thirty years, and now the western region will strengthen its trade, economic, technological, and financial cooperation with Central Asia, South Asia, the Middle East, and even Europe, in order to continue China’s opening up and achieve balanced and coordinated development between the different areas. In particular, China’s western provinces stand to gain from the BRI, as the project has further connected them with neighboring countries.44
The BRI is not only a long-term project but also a profound summary of China’s economic cooperation with both Europe and other Asian countries over the past twenty years. After more than twenty years of joint efforts, China has become the main partner of Russia and Central Asian states, recently cooperating on various new infrastructure and energy projects. The achievements of the past twenty years have enabled these countries to integrate more closely into the world economy. The achievements have not only become a solid foundation for the BRI but have also clearly proven that the BRI is in line with the interests of Eurasian countries in seeking economic development and expanding economic cooperation.
The BRI is a proposal to strengthen economic cooperation between China and participating countries as economic globalization and regional cooperation change dramatically
The deep-seated impact of the 2008 financial crisis continues, the world economy’s recovery is slow, and development in countries across the world has been uneven. The structure and rules of international investment and trade are changing profoundly, and the problems all developing countries face are still serious. Although the United States suffered during the financial crisis and lost some of its economic power, it has been trying to lead the world’s new industrial revolution. During former U.S. president Barack Obama’s second term, the United States actively promoted Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) negotiations in an attempt to reshape international trade and investment. When Trump took office, the United States withdrew from the TPP and TTIP negotiations, forcing other countries to go their own way amid Trump’s proclamations of “America First.”
In this context, the BRI has aimed at promoting the free flow of goods and services, the efficient allocation of resources, and the deep integration of markets; encouraging countries along the BRI to coordinate economic policy and carry out broader and more in-depth regional cooperation of higher standards; and jointly creating an open, inclusive, and balanced regional economic cooperation architecture that benefits all.45 As a comprehensive transregional economic cooperation initiative, the BRI includes Asia, the Caucasus, Russia, and Europe. And countries cooperate in sectors as varied as transportation, energy, trade, finance, industry, and education, among other fields. This wide array demonstrates how BRI construction is highly flexible based on strategic coordination and policy communication between China and the countries involved, without mandatory institutional arrangements creating unnecessary strictures. The fundamental purpose of the BRI is to facilitate closer economic relations among the involved countries and deeper mutual cooperation among member states, as well as more space for development.
The BRI is a natural extension of China’s participation in and integration into the global system
Participating in and integrating into the global system have been China’s main goals for a long time. Since the implementation of the opening and reform policy, China’s integration into the global system has accelerated, its links with other countries have expanded, and its role in the international system has become more prominent. Thus, China is more deeply embedded in the global system. This reality requires China to sort out its domestic and foreign policies, adjust and change its relatively scattered cooperation policies, and better coordinate its relationship with all parts of the global system to demonstrate it can bear the responsibility of a great power and promote common development during times of peace. The BRI is China’s latest answer to these challenges. It began by improving economic cooperation with participating countries and has helped China maintain momentum while integrating into the global system.
The BRI is an important attempt by China to participate in and improve the global governance system
Since the end of the Cold War, many important political and economic changes have taken place internationally. New threats and challenges have emerged. Meanwhile, international rules and arrangements have failed to fully reflect the reality of the international order. Considering the basic demands of the vast majority of the members of the international community, the global governance system needs to be further improved. Promoting economic growth, safeguarding people’s livelihoods, deepening mutual cooperation, and preventing the spread of extremism and terrorism are essential goals.
There are already some regional economic cooperation programs and initiatives designed to tackle the aforementioned issues, such as the Russia-led Eurasian Economic Union (EEU), the U.S.-sponsored New Silk Road Initiative, the EU’s New Central Asia Strategy,46 the EU-Asia Connectivity Strategy,47 the Turkic Council, the Gulf Cooperation Council, and the South Asian Association for Regional Cooperation. However, it is difficult to truly solve the various regional challenges and problems by relying on one or even several existing solutions. The BRI is not a competitor or substitute for already existing regional cooperation programs. It is based on the reality that the development and stability of these countries and regions are highly important to China. Therefore, as long as the BRI promotes regional economic cooperation and maintains regional stability, the initiative will find common ground and expand cooperation with them, and achieve equal cooperation and mutual benefit.
In fact, as a developing country, China has unique experience in the process of participating in and integrating into the global governance system, and has carried out a series of attempts to improve the global governance system conceptually and practically. For example, the ideas and policies that bring harmony, security, and prosperity to neighbors proposed and pursued by China have compensated to some extent for the development and stability gap left by the global governance system in different regions, and these policies have achieved good results in the past several decades.48 The BRI is merely the latest iteration of such concepts and policies.
Challenges and Responses
The BRI cannot be accomplished overnight, and there are lots of difficulties and challenges to overcome. In this regard, many people around the world think that China is too optimistic about the BRI. However, China has a relatively straightforward outlook toward the BRI. China has adopted a fairly pragmatic attitude while the international community has doubted and criticized the BRI. As China has explained the BRI to foreign countries, it has also actively adjusted and improved its BRI practices.
Doubts and Criticisms
The frequent doubts and criticisms the BRI has faced include: the BRI is China’s external-facing geopolitical strategy while China subverts the existing international order; the BRI is China’s effort to build a sphere of influence—countries who participate will be trapped by Chinese investment and forced to supply Beijing with commodities and raw materials before becoming dumping grounds for Chinese products; China will transfer its industrial overcapacity to foreign countries; China is exporting its economic development model through the BRI, which will lead to overdevelopment, environmental pollution, debt traps, and more.
The most popular of these may be regarding the BRI as China’s new geopolitical strategy. This view generally sees that China has seized the opportunity when Russia, the United States, and Europe left a geopolitical vacuum in Central Asia. Proponents of this view think the BRI is a way to not only ensure energy supply security but also help China improve cooperation with its western neighbors and counterbalance the U.S. pivot to Asia.
In fact, this false dilemma, based on the hypothesis that China and the United States are locked in a zero-sum game, has inherent contradictions. First, Russia, the United States, and Europe have significant interests in Central Asia and are still pursuing their own strategies, so there is no vacuum. Secondly, although the U.S. strategy of rebalancing has brought new challenges to China, Beijing cannot give up its strategic interests in East Asia. Thirdly, TPP, TTIP, and the 2018 trade agreement between the United States, Canada, and Mexico are completely different from the BRI. China will naturally take corresponding measures to deal with the economic impacts of those agreements because it has many economic ties to the countries involved, but the BRI has no substantive relationship with those deals. Therefore, China’s participation in improving the global governance system is not to correct or subvert the existing international order, as some analyses have envisioned.49
The achievements of China’s forty-year opening and reform policy are based on the country’s integration into the existing international system. China hopes the system will become better, more reasonable, and less chaotic, but it does not intend to scrap it and start all over again. Ignoring this point and overemphasizing the negative interpretation of the changes brought about by the BRI, and introducing policies to hedge against the BRI, or forming an international alliance to disrupt or contain the BRI, would reflect the injustices and imperfections of the existing international order and global governance system.
Interpretation and Response
The Chinese government believes that these doubts and criticisms are usually caused by misunderstandings and distortions.50 Some governments and scholars misunderstand the BRI because of insufficient information. Some negative distortions come from prejudice against Beijing and serve to help contain China, and when combined with misinterpretations of China’s goals, they link the BRI with rhetoric about China as threatening, thereby spreading a negative image of the BRI. In addition, the gap between what’s been proposed and how it’s implemented will cause further misunderstanding. Of course, some BRI projects are not perfect, and many of its plans and working mechanisms need to be strengthened. The China-Europe Railway Express, for example, has improved connectivity between Chinese provinces and EU countries, but the service is expensive and needs to be better organized. Chinese scholars have raised a lot of criticisms and suggestions in order to correct those polices and activities. However, if scholars exaggerate the negative aspects of the BRI purposely, it would obviously undermine international public opinion, which is necessary to foster deep discussions and studies of the BRI.
In recent years, China has made many efforts to increase the BRI’s transparency and to ensure the project’s openness and reciprocity in order to strengthen mutual trust among the participants. On the one hand, China encourages officials, media commentators, and scholars to explain its policy through interpreting, studying, and communicating, thereby making sure domestic and international communities comprehensively understand the BRI. On the other hand, China is trying hard to encourage foreign governments, enterprises, and social organizations to show the openness, sharing, development, and other characteristics of the BRI to set good examples and consolidate the BRI’s foundation by optimizing policy design, establishing high normative standards, and improving project quality. China also cooperates with transnational groups to achieve common interests. For example, the AIIB cooperates with the World Bank and the European Bank for Reconstruction and Development in screening, implementing, and supervising projects.51 In addition, Chinese companies cooperate with companies from the United States, Japan,52 Russia, EU member states, and many other countries to carry out some BRI projects.53
China’s efforts are aimed at convincing each country that it will not force them to accept BRI projects against their will. The BRI is not a geoeconomic plan dominated by China. China also does not desire to establish regional organizations to counter the EU, the EEU, or others. More importantly, China can respect the international community’s concerns and worries, can improve the BRI by continuously learning and correcting errors, and can strive to implement the highest-quality development. Therefore, incorrect information and biased thinking are obstacles to understanding the real aims of the BRI.
The Role of Multiple Actors
Different players must perform their own functions when carrying out BRI projects. That means it is necessary to rationalize the basic relationship between government and enterprises and politics and economics. Specifically, the government is the policymaker, but businesses and societies are the main BRI practitioners and builders. The government-guided, enterprise-led BRI pattern has taken shape over the past five years. It would be misleading to equate Chinese companies with the Chinese government’s policy tools when thinking about and analyzing the BRI. It is difficult to draw a conclusion consistent with reality while ignoring the diverging interests between the Chinese government and China’s businesses in this process.
In fact, businesses are the mainstay of pushing forward with the BRI’s development; their goals and actions are sometimes consistent with government policies, and are sometimes to the contrary.54 Therefore, on the one hand, the Chinese government actively cooperates with other governments to improve the business environment by coordinating policy and new trade and investment arrangements under the BRI framework, and it also provides relevant support to Chinese companies. This is an important guarantee that the BRI can make progress. On the other hand, the Chinese government also attaches importance to regulating and guiding corporate behavior through international norms and laws, preventing capital from excessive pursuit of profits that harms the BRI, and avoiding market capture by enterprises and capital.
Those who can benefit from this environment include not only state-owned Chinese companies but also private companies. This is a subject that can very easily cause misunderstandings. Some observers complain that state-owned companies have gained the lion’s share of support and funding when carrying out BRI projects,55 and private companies have been marginalized. In fact, China attaches great importance to the role of private companies. In the short run, China will let private enterprises act as the new force driving the BRI’s development. In the long run, China hopes to strengthen private enterprises through the BRI and thereby optimize its national economic structure. However, the BRI projects implemented by Chinese state-owned companies are usually large scale, and both time and capital intensive. That makes the private companies’ BRI projects relatively too small to attract attention. But among the more than 20,000 Chinese enterprises that are participating in the BRI, private enterprises account for the majority. In 2017, trade between private enterprises and BRI countries accounted for 43 percent of the total trade volume between China and those countries.56 In fact, state-owned and private companies usually cooperate to carry out many large-scale BRI projects, especially those related to infrastructure.57 It’s true that Chinese state-owned enterprises have won those large contracts, but they cooperate with the private sector, often hiring private companies as subcontractors on BRI projects.
Rebalancing the Structure
Optimization has been a key part of China’s efforts to make progress on the BRI over the last two years. Initially, China and the involved countries prioritized the international market, so Chinese businesses and social organizations were encouraged to enter markets in other countries. As a result, scholars and the public have also paid more attention to Chinese enterprises’ efforts abroad. There’s no doubt that the international markets are very important for the BRI’s progress, but it does not help to neglect the fact that China plays an increasingly large role in international economic growth and value distribution as one of the world’s major markets. Therefore, China has tried to balance between opening its domestic market and participating in the international market. The China International Import Expo, which brings Chinese buyers together with foreign companies hoping to sell goods, is one symbol of that rebalance policy.
In fact, the BRI is a strategic plan based on China’s policy of opening its domestic market. One of the main purposes of the BRI is to strengthen the economic and social connections between China’s coasts and inner areas, and to solve one long-term development obstacle that China has faced: the dual nature of its east and west regions and urban and rural areas. With increasing external challenges and diminishing dividends from entering the World Trade Organization, rebuilding the relationship between these areas has become an urgent task for China. The 2008 global financial crisis accelerated the need for China to address this problem, while also hastening China’s response to it.
Despite many misunderstandings about the BRI, the original idea behind China’s implementation remains unchanged. China hopes that the BRI will bring development, prosperity, peace, and security, and it hopes to work with all partners to create a bright future for the world. Therefore, China is striving to set a new pattern to improve the domestic business environment for foreign companies and pursue the intended high-quality development of the BRI along with the other participants. In the future, doing a good job on project construction, market development, financial security, communications, standardized operations, and risk prevention will be the key points of China’s BRI policy. In this process, giving companies a leading role, promoting market-based rules, and optimizing the balance between the domestic and international markets will be crucial to realizing the BRI’s potential.
The BRI presents unique challenges and opportunities for China, Russia, and the United States, resulting in disagreements over the initiative’s objectives and increasing the potential for misunderstandings. For China, the BRI represents Xi Jinping’s ambition to solidify China as a global power, increase its global influence, and direct global economic flows toward Beijing. The existing international system cannot adequately respond to the growing development needs of many in the international community. China promotes the BRI as a way to improve global governance systems and accelerate international development. It is seen in China as a benevolent project that seeks to foster win-win cooperation, improve China’s ties with other countries, and provide more opportunities for international partnerships.
From Russia’s perspective, the BRI is primarily an economic opportunity with long-term implications for Russia’s strategic interests. Moscow views the BRI as a symbol of China’s economic and financial might and its desire to assert its status as a global power through greater foreign engagement. Russia is focused on capitalizing on the BRI’s economic potential while limiting China’s ability to interfere with its own national security and sovereignty. Given Putin and Xi’s strong personal relationship, Moscow is confident it can balance these intertwined goals.
In the United States, the BRI faces significant criticism for a lack of transparency and economic sustainability. An ongoing reassessment in Washington over engagement with China has negatively affected policymakers’ views of the BRI. Washington does not disagree with the need for major infrastructure development but views the initiative in the context of China’s status as a rising power and competitor. It is still grappling with how to participate in opportunities presented by the initiative while upholding its own standards and limiting the decline of U.S. influence and interests.
Whether the BRI is motivated by geopolitical considerations remains a central area of debate. In China, there is clear messaging that the initiative’s stated goals to address the need for global infrastructure development and contribute to developing countries’ economic growth do not contradict the government’s stance that the initiative has no greater geopolitical motives.
Russian and U.S. interpretations of the project acknowledge that economic development is a central tenet of the BRI, but they also worry to varying degrees about the initiative’s geostrategic implications. Moscow has largely muted its geopolitical concerns given its close political alignment with Beijing and the potential benefits of the BRI. However, it still worries about the consequences of a strong China dominating Eurasia and has tried to diversify its economic relations in Asia.
U.S. policymakers emphasize the unavoidable linkages between the economic goals and geopolitical ramifications of the BRI. Washington clearly sees the initiative as having underlying strategic motivations and the potential to alter the geopolitical landscape and global governance standards. These criticisms are exacerbated by BRI projects that have resulted in China taking possession of strategic infrastructure in foreign countries.
Both Russia and the United States would be happy to see a more inclusive and transparent BRI that includes greater participation of non-Chinese companies. Russia is taking advantage of available opportunities for investment and heavily seeking partnership with China on the BRI. U.S. companies seek opportunities to participate in BRI projects but have highlighted a number of obstacles, including a lack of available information and equitable bidding processes that hinder fair competition.
These concerns contrast with Beijing’s claim that the BRI is inclusive and open. China encourages foreign companies to participate while pushing back on the narrative that they are at a disadvantage. Instead, China attributes the lack of foreign participation to an inability to compete with domestic companies. China will have to effectively address these concerns in order to generate greater foreign participation and alleviate U.S. and Russian concerns over the BRI’s geopolitical impact.
Both China and the United States can learn from the successes of the Asian Infrastructure Investment Bank to help foster a more inclusive and transparent BRI. For Beijing, this includes appointing accessible and transparent leadership to proactively engage and respond to international concerns about the BRI, acknowledging both its failures and successes. Washington should learn that flat out condemnation of the initiative only serves to limit China’s receptiveness to legitimate U.S. concerns.
There remain a number of opportunities and challenges for the BRI going forward. Russia is aware of its growing economic asymmetry with China but is determined to remain an equal partner. Moscow will continue to support the BRI, focusing on integrating BRI projects with its own foreign policy and development priorities. Key to this will be preserving its position as the preeminent military power in Central Asia. Moscow will also seek to strengthen ties with other powerful regional actors in order to balance against China’s growing influence.
The United States will continue to advocate for greater transparency and economic sustainability in BRI projects. It will look to Beijing to actively respond to its criticisms, many of which are shared by the international community. Washington’s perception of the BRI is likely to be heavily influenced by the increasingly competitive nature of the relationship. However, if U.S. criticisms of the initiative are not backed up with legitimate policy alternatives, developing countries are likely to continue to turn to China for their development needs. The priority for Washington is to devise policies that uphold U.S. interests and values while encouraging China to adopt them itself. Otherwise, Washington risks creating a zero-sum environment where countries must choose between the United States and China, an outcome that would only further exacerbate bilateral tensions.
China has made clear that the BRI is here to stay. Already, the initiative has helped bring needed infrastructure and investment to many developing countries. If successful, the BRI can help China establish itself as the world’s preeminent economic power. However, as the initiative has grown, so has scrutiny of China’s greater international engagement. Furthermore, the initiative’s success is not guaranteed. Chinese policymakers recognize there are a number of difficulties and challenges facing the BRI going forward, including perceptions that it has greater strategic ambitions than indicated, concerns over economic sustainability and transparency of projects, and confusion over how it complements or subverts the current international order. However, since the BRI’s official launch, Beijing has accumulated a pool of completed and ongoing projects, both successful and failed, from which to learn valuable lessons and adapt its practices where needed. Facing a slowing domestic economy, Beijing will have to mitigate its risky investments and incorporate lessons from past mistakes. Abroad, it needs to demonstrate it is actively improving the BRI in line with international feedback. This will be key to ensure the BRI accelerates global economic growth instead of hindering it.
The authors are grateful for research assistance provided by Lucas Tcheyan, Allison Lapehn, and Jacob Gladysz.
This paper is made possible with support from The Rockefeller Foundation.
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49 Andrea Kendall-Taylor and David Shullman, “How Russia and China Undermine Democracy,” Foreign Affairs, October 2, 2018, https://www.foreignaffairs.com/articles/china/2018-10-02/how-russia-and-china-undermine-democracy.
50 Ye Yu, “China’s response to Belt and Road backlash,” East Asia Forum, December 15, 2018, https://www.eastasiaforum.org/2018/12/15/chinas-response-to-belt-and-road-backlash/.
51 For example, the Dushanbe-Uzbekistan Border Road Improvement Project is proved by AIIB. An AIIB loan of $27.5 million will have a 15-year term, and EBRD, as the co-financier, will provide a loan of $62.5 million. All contracts financed by AIIB under the loan will be procured through worldwide eligibility procurement procedures in accordance with EBRD’s policies. EBRD will provide disbursement review services for AIIB. See the project document: https://www.aiib.org/en/projects/approved/2016/tajikistan-border-road.html.
52 China and Japan signed the cooperation agreements for third-party markets on October 26, 2018. See “The First China-Japan Third-Party Market Cooperation Forum Held in Beijing,” Ministry of Commerce of the PRC, October 28, 2018, http://english.mofcom.gov.cn/article/newsrelease/significantnews/201810/20181002801052.shtml.
53 U.S. companies such as GE and Caterpillar have already taken part in BRI projects. GE earned more than $2.3 billion in 2016 from providing equipment to BRI projects. See “CPEC: Debt trap or Development Opportunity”, Economic and Commercial Section of the Consulate General of the PRC in Karachi, October 9, 2018, http://karachi.mofcom.gov.cn/article/jmxw/201810/20181002793580.shtml; “Five Years On–Belt and Road Breaks New Ground, Forges New Partnerships,” General Electric, November 14, 2018, https://www.ge.com/reports/five-years-belt-road-breaks-new-ground-forges-new-partnerships/.
54 Companies and governments have different understandings of the cost problems associated with the China Railway Express, which transports products between China and European, Central Asian, and Middle Eastern countries. Local governments, eager to take advantage of central government policies, sometimes expand projects and make them more expensive for the businesses that use them.
55 Anthony Rowley, “China’s BRI Could Be Administrative Nightmare,” Nikkei Asian Review, October 31, 2017, https://asia.nikkei.com/Opinion/China-s-BRI-could-be-administrative-nightmare2.
57 The cooperation between state-owned enterprises and private companies is very common in international construction projects. For example, the Wuhan Bridge Heavy Industries Group, a private company, cooperated with state-owned companies China Railway Group, China Railway Construction Corporation, and China Communication Construction on bridge projects in Malaysia and Myanmar.