Mixed feelings on the BRI were evident by the lack of high-level participation at this BRI forum compared to previous summits. Still, representatives from over 130 countries attended, with major business deals announced with countries like Ethiopia, Egypt, Thailand and Chile. As the U.S.-China rivalry has heated up in recent years, the BRI is seen as part of China’s push to create alternatives to the U.S.-led global order.

USIP’s Carla Freeman and Henry Tugendhat look at how the BRI has evolved, how it fits into Xi’s broader foreign policy vision and what’s in store for the BRI in the years ahead.

How has the BRI evolved over the last 10 years?

Tugendhat: Xi launched the BRI in 2013 as a “new Silk Road” aimed at expanding Chinese exports of infrastructure goods and services. Among many ambitions, China hoped this initiative could increase trade networks, diplomatic relations and further strategic goals. China’s attention originally focused on Central and Southeast Asia and Europe, then quickly expanded to encompass most of Africa, Latin America and even some Western partners, such as Italy and Australia’s Victoria State. However, the Global South has remained the primary focus of the initiative, and China frequently invokes narratives of South-South cooperation and “win-win” deals as it promotes the BRI.

Contrary to common perceptions of a coordinated plan, the BRI has no formal budget, nor does it offer any guarantees of financing to countries that sign MOUs. The only funding that was created as a direct result of the BRI is the Silk Road Fund, which has financed 75 projects worth a total of $22 billion according to China’s State Council. However, China has also defined export credits offered by its EXIM Bank and the China Development Bank (CDB) as key pillars of the BRI. Since the early 2000s, China EXIM and CDB began issuing loans to Global South governments and institutions to pay for infrastructure projects. In many respects, the BRI launch was a rebranding of Chinese export finance to create a coherent narrative that could encompass wider diplomatic and strategic goals.

According to data gathered by Boston University’s Global Development Policy Center, China EXIM and CDB lending to Africa and Latin America started to decrease around 2016. It was around this time that some debtors started straining under the weight of China’s forthcoming credit. Venezuela stands out in particular. Since then, these banks’ lending to Global South countries has continued to fall, with fewer and fewer disbursements each year between 2017 and 2023. The increase in debt defaults among many of the world’s poorest countries, some of whom were holding unsustainable debts to China, was likely a factor. These financial headaches started to outweigh the diplomatic gains that China may have hoped for when it originally signed off on these agreements. As a result, there was some speculation that the BRI was winding down or phasing out. This week’s announcement that China hopes to commit new loans to BRI countries through the China EXIM Bank and CDB is therefore significant.

A 2021 study by AidData found that 35% of BRI projects have been challenged by corruption, excessive debt or labor exploitation. What lessons, if any, has China learned over the last 10 years to address these problems? 

Freeman: Corruption has plagued numerous Chinese projects in BRI countries, many of which are in countries where large-scale infrastructure projects are particularly prone to being exploited by corrupt officials. Aside from corruption, some projects in BRI countries have carried with them significant adverse environmental and social impacts, particularly as many have proceeded without adequate planning, including environmental or social impact evaluation. Chinese infrastructure projects have opened sensitive environmental areas to development increasing biodiversity loss while dams and other changes to water flows are putting new pressures on critical water resources.

While China works to improve its environmental record at home, the BRI has also proved a conduit for Beijing to export some of its most unfriendly climate technology. In addition to social displacements forced by large-scale infrastructure development, there are other human rights concerns associated with the BRI, including violations of local labor laws.

The lack of transparency surrounding many Chinese projects in BRI countries has fueled controversy over how China intends to use its growing economic influence. There is speculation that China uses debt to “trap” countries into providing long-term access to public assets, for example. Although careful research challenges this accusation, the reality is that China is still struggling to find a solution that is acceptable to all parties involved in many BRI countries’ debt sustainability issues.

How does the BRI factor into Xi Jinping’s broader quest to build an alternative to the U.S.-dominated international order?

Freeman and Tugendhat: The BRI is first and foremost a diplomatic initiative. China’s vision is that this will strengthen bilateral relationships and boost exports of Chinese goods and services while improving the economies of recipient countries. But this broad tent policy has also allowed China to pursue its strategic objectives of reducing the constraints on its geopolitical and economic rise it perceives go hand-in-hand with the U.S.-dominated international order.  

Indeed, when the BRI was first rolled out in Kazakhstan in 2013, the Obama administration was pressing forward with its “Asia Pivot” and dedicating more political and military resources to the Western Pacific to China’s East. Amid worries about the growing U.S. presence in the South and East China Seas, Wang Jisi, China’s foremost strategist, proposed that China undertake its own pivot and “march West,” boosting development in its restive western hinterland and making it a platform for Eurasian integration through new transportation infrastructure that would give China unimpeded access to new markets.

Moreover, the BRI is fundamentally a set of bilateral relationships between China and project host countries. This broadly defined policy claims to offer an alternative to policy prescriptions and lending by the U.S.-dominated Bretton Woods institutions, the World Bank and International Monetary Fund. China’s export credits certainly have an economic rationale as they can support Chinese firms who might not otherwise have the necessary funding to enter new markets, but they also advance strategic goals such as: offering financing for countries that switch diplomatic recognition from Taipei to Beijing or allowing China to deepen its ties with countries traditionally in the United States’ spheres of influence.

But the BRI’s diplomatic role involves more than just infrastructure and financing; it is also a platform for Beijing to position itself as a leader on Global South issues. Xi used this year’s BRI forum to roll out a proposal for global governance of artificial intelligence, underscoring the importance of “equal rights” to such technology for development just a day after Washington added new restrictions to limit China’s access to advanced chips. Other Chinese initiatives announced in the past few years, like the Global Development Initiative, Global Security Initiative and Global Civilization Initiative seek to boost China’s profile further while couched in language that explicitly challenges international American leadership and promises an alternative future drawing on “Chinese wisdom.”

What’s ahead for Belt and Road Initiative 2.0?

Freeman and Tugendhat: It was certainly not a given that that China would announce a second iteration of the BRI that relied on more credit. Given the current debt sustainability challenges among some BRI members, Beijing could have pivoted in multiple directions, such as increasing its zero-interest loan program through its Ministry of Commerce, increasing grant-based aid or raising their financial contributions to their new multilateral institutions – the Asian Infrastructure Investment Bank and the BRICS New Development Bank — in order to pool risk. Instead, the Chinese government is encouraging China EXIM and CDB to raise an additional $100 billion toward new BRI projects.

For now, it’s unclear what would distinguish these banks’ typical fundraising activities and disbursements from the BRI’s focus. Moreover, there is no clarity about which regions will be targeted by this increase in finance. It’s also possible that Africa and Latin America will receive very little additional lending going forward as Chinese policy banks shift to focus on supporting their exporters in other regions of the world. They may also be more sensitive to lending to countries at risk of debt distress. There is also no clarity over the length of time envisioned for these additional disbursements of $100 billion.

Despite speculation that the current economic headwinds slowing China’s once booming economy might derail the BRI, Xi’s vision for a new Silk Road is here to stay. There is no doubt that after its decade of accumulated experience and international scrutiny, it has been recalibrated to give greater attention to risk going forward. At the latest BRI forum, Xi laid out eight guiding principles for a new and improved “high quality” BRI, aimed at strengthening the BRI’s record on issues like corruption, the environment and debt over the next 10 years. To reduce corruption, Xi promised a new system to evaluate companies’ integrity and compliance as part of a plan for "integrity-based" BRI cooperation. More will also be done to “green” the BRI, building on a record of unprecedented investment in renewable energy this year. Moving forward, the BRI will almost certainly comprise smaller projects consistent with an already observable trend, with “small is beautiful” likely to be a new BRI mantra.

The BRI will remain a source of international competition as much as a driver of connectivity. Still, even if it is new and improved, the BRI is likely to face stiff competition from other big economies eager to help play a role in filling the still enormous deficit in global infrastructure —a boon for some savvy would-be recipient governments able to pick among competing infrastructure partners. China plans to focus more heavily on using advanced technology to increase digital connectivity through the BRI, including expanding digital finance and e-commerce platforms already viewed with unease by the West. The United States and its allies and partners see these plans for this “Digital Silk Road” as not only potentially risky for Western commercial interests but also to internet openness and control and influence over data.

The war in Ukraine has already marked a setback for the BRI’s goal of trans-Eurasian connectivity to Europe. Indeed, Hungary’s Viktor Orban was the only EU leader at the BRI forum. However, Russia, with its own vast Eurasian footprint, appears eager to expand its cooperation through the BRI. Although facing an International Criminal Court warrant, Vladimir Putin made his first trip across Russian borders to attend the BRI forum, a sign of Russia’s interest in deepening engagement in the BRI as it focuses on reorienting its economy toward Asia.