What opportunities and challenges will the international situation have on the fate of the "One Belt, One Road" initiative?

Since the Chinese government launched the "Belt and Road" initiative in 2013, the "debt trap" issue has been causing controversy among project participating countries. As the United States and the European Union warn China about the export of excess production capacity, and Beijing's role in aiding Russia's war with Ukraine becomes increasingly apparent, the fate of the "One Belt, One Road" initiative has once again become the focus of public opinion.

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Since Chinese leader Xi Jinping launched the Belt and Road Initiative (BRI) in 2013, agreements have been signed with more than 150 countries, with the total project value reaching approximately US$1 trillion. As the Belt and Road Initiative enters its second decade, what obstacles and opportunities does the initiative face?

In a webinar held this Friday (April 26) by the Center for Strategic and International Studies (CSIS), a Washington think tank, a number of China experts assessed the risks and opportunities of China’s “One Belt, One Road” initiative. Experts say the current decline in borrowing capacity of many countries and increased suspicion among partner countries of China's broader geopolitical intentions have become major challenges for the project.

Manoj Kewalramani, senior fellow at the China Program at the Center for Strategic and International Studies, pointed out that China is trying to adjust the development direction of the "Belt and Road Initiative" from investing in large-scale infrastructure to small-scale projects. and green development. And this is also an opportunity for enterprises.

He said: "Because of tariffs and Western pressure on China, this may be an opportunity.(Businesses) staying in China may become a threat, but also because China's consumption cannot keep up with production, so China has overcapacity, There is a need to leave China. 'One Belt, One Road' creates a political safety net and creates opportunities for companies to move investments and potentially enter Western markets without introducing additional risks."

Yunnan Chen, a researcher in the development and public finance program at the Overseas Development Institute (ODI), a British think tank, pointed out that the Chinese authorities have been criticized by the international community for putting most developing countries into debt traps through the "One Belt, One Road" initiative. But she believes that this has also led to China no longer having the ability to invest in large-scale projects.

She said: "Looking ahead, as China's financial institutions become increasingly constrained, the reality is that China does not have the capabilities it has in the past. China is seeking to expand the breadth of multilateral players in the Belt and Road Initiative, both to add additional capabilities and To take on risk exposure, which has been an issue in recent years.”

Chen Yunnan also said that China sees opportunities in green and clean technologies in Southeast Asia and Latin America, especially the electric vehicle industry, as Chinese manufacturers face increasing pressure in markets outside the "global south" countries. In addition, China also sees opportunities in Eastern Europe, West Asia, and Central Asia to break away from Russia's traditional sphere of influence. She pointed out that China's export credit agencies are increasing their support for overseas green projects, and the proportion of guarantees for domestic trade credit and overseas investment is increasing.

Henry Tugendhat, an expert on the Chinese economy at the United States Institute of Peace (USIP), is worried that the evolution of internal auditing in Chinese credit institutions will become an ongoing challenge to the Belt and Road Initiative.

"It's difficult for Chinese credit institutions to really manage the risks involved," he said. "They are actively looking for projects, and local companies have a better idea of ​​where there are construction opportunities. But these companies have an incentive to bid up prices, or do some They know projects are not necessarily sustainable, so that will continue to cause problems for Chinese lenders."