The Asia-Pacific region seems to be fascinated by China’s Belt and Road Initiative (BRI), which focuses primarily on infrastructure development in the participating countries.

According to Eric Brown, research analyst at Geopolitical Economic Risk, the Belt and Road Initiative promises to connect China to both neighboring and distant regions along its southern and western borders through a massive infrastructure investment project, including roads, railways, ports, energy pipelines and digital networks. The BRI promises to spend $1 trillion, several times larger than the Marshall Plan undertaken to rejuvenate the European economy. In total, the BRI spans more than 60 countries (figures vary), impacts nearly 62 percent of the world’s population and captures more than 30 percent of global gross domestic product. But despite its impressive statistics, the project still only meets a fraction of the region’s larger infrastructure needs.

The Asian Development Bank (ADB) estimates that the continent will need more than $26 trillion in investment between 2016 and 2030. The international community is aware of the US-China trade war that could trigger a global recession. That aside, the BRI may aim to replace a Chinese-led economic sphere in Eurasia in place of the Western-led economic system that has ruled the world since World War II.

Critics argue that the Bretton Woods institutions and others are a rules-based and legally enforceable system, while China’s activities in the South China Sea appear to be vigorous and have caused unrest in neighboring countries that also lay claim to the disputed areas. It is further said that despite the existing proposal, the specific physical and conceptual margins of the BRI remain ambiguous. There is no clear timeline for completion and some projects that were started before the official launch date have been retroactively included. Physical infrastructure projects are complemented by intangibles such as trade agreements, cultural exchanges, tourism and educational links. In addition to transportation networks and energy systems, the BRI infrastructure portfolio has been expanded to include electronic, space and polar elements. Moreover, little progress has been made, except for the China-Pakistan Economic Corridor (CPEC), which is also not well accepted in Pakistan. Any international initiative, to be successful, must be mutually beneficial to the parties involved. In the case of China, BRI would facilitate the export of excess capacity in equipment, steel and cement; internalization of Chinese currency; diversification of energy trade; economic development in rural areas of China’s western and southern regions that have not benefited from China’s phenomenal economic growth in recent decades.

BRI is expected to benefit China by enhancing the diversification and competitiveness of the foreign market, and especially by the emergence of a central political and economic power in Eurasia. Of course, questions will arise over the financing of BRI projects. Asia Infrastructure Investment Bank (AIIB) consisting of 93 member countries, a competing structure of IBRD and IMF- and New Development Bank (NDP) consisting of BRICS countries, are expected to promote sustainable development and infrastructure projects of the member countries.

The US was unhappy about the creation of the AIIB from the start, as it did not want another multilateral development bank to emerge as a rival to the ADB and the World Bank. In addition, the US and Europe were averse to China’s authoritarian system of governance.

The West can take heart from Manixin Pei’s conclusion (China’s Trapped Transition), in which Pei theorizes that China has reached a stage of stagnant growth. According to Pei, China’s political system cannot be reformed because of its deep-rooted corruption problems and the lack of institutional infrastructure to address these problems. Pei calls China’s situation “destructive political dynamics inherent in an autocracy caught up in rapid socio-economic change.” Fareed Zakaria points to the well-known scholarly belief that there is a “zone of transition” for authoritarian countries when this happens—between $5,000 and $10,000 per capita GDP (in purchasing power terms). China is at the top of the range, around $10,000. Given China’s level of economic, social, and educational development, it is highly unusual that China, among Asian countries, has seen almost no movement toward political reform.

Manixin Pei attributes this lack of movement to a corrupt but united Communist Party that is vigilant against any encroachment on its powers. The Hong Kong protests are thus unlikely to trigger an Eastern European deluge that will lead to the demise of the Soviet Union. More likely, they will result in another Tiananmen Square. China’s generous lending policy has led to “debt diplomacy” as some recipients are now unable to repay the loans. Examples include the construction of the Hambantota port in Sri Lanka and the Chinese-financed rail link in Laos.

Conclusion

There has now been a significant shift from the initial strong support for the BRI to one of negativity and concern. French President Emmanuel Macron has urged caution, suggesting during a trip to China that the BRI could turn partner countries into “vassal states.” A report by the Council of Foreign Relations has raised Indian concerns that the BRI is a plan to dominate Asia, warning of what some analysts have called a “String of Pearls” geoeconomic strategy in which China creates unsustainable debt burdens for its Indian Ocean neighbors and potentially seizes control of regional choke points. While President Trump may want to use India as a counterweight to China, countries like Bangladesh must maintain a balanced policy toward the two countries. Despite our natural affinity with India, we must follow our national interests wherever they lead.