Skip to main content
SpringerLink
Log in

Unraveling the Belt and Road Initiative: China’s “Building Out” Strategy

  • Manuscript
  • Published:
East Asia Aims and scope Submit manuscript

Abstract

Scholars and analysts have sought to clarify the Chinese Communist Party’s motives for carrying out the Belt and Road Initiative (BRI), a series of infrastructure investments in countries across the globe. While many emphasize Beijing’s geopolitical interests, this paper argues that the BRI should also be understood as a large-scale effort to create business activities for Chinese companies and workers outside of China. We define the contours of this “building out” strategy by analyzing the stages that typify BRI projects: project selection, project financing, project construction, and post-construction operation and management. Our analysis draws, in large part, on data that we have compiled from a sample of BRI projects. After showing macro-level trends in the data, we offer three in-depth case studies to clarify the underlying mechanisms at work. Our findings suggest that BRI projects are engineered to direct finance and construction bids to Chinese companies, which are typically state-owned.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. China’s going out strategy was launched in the late 1990s, in an effort to internationalize China’s economy by, among other things, attracting foreign investment inflows and promoting foreign investment outflows. There are several similarities between the going out strategy and the BRI, including the dominant role of state-owned enterprises. There are also import differences, with the BRI being much larger in scale and enjoying considerably more financial support from Chinese state-owned bank [13]. Additionally, the BRI is more focused on regional integration than the going out strategy, which was bilateral in nature, and has a clearer geostrategic dimension [14].

  2. It should be noted that these overviews were compiled using only English language sources.

  3. To the extent that this is true, it suggests that Chinese investors hold considerable leverage over hosts, as local content requirements are often imposed on foreign investors by host countries’ governments [41].

  4. According to Hundlani and Kannangara [54], approximately 900 workers were employed at the operational Hambantota port, including approximately 35 Chinese workers.

  5. Casey and Krauss report that the dam runs at around half capacity [59].

  6. This was the subject of a series of lawsuits in Kenya, leading Kenya’s Court of Appeals to conclude in 2020 that the SGR contract was illegal.

  7. Chinese lenders have taken steps to prevent defaults, such as through collateralizing loans against revenue generated from future commodity exports [85].

References

  1. Economy, E. C. (2018). The third revolution: Xi Jinping and the new Chinese state. Oxford University Press.

  2. Nordin, A. H. M., & Wessmann, M. (2018). Will Trump make China great again? The Belt and Road Initiative and international order. International Affairs, 94(2), 231-249.

    Article  Google Scholar 

  3. Nedopil, C. (2021). Countries of the Belt and Road Initiative. Shanghai, Green Finance & Development Center, FISF Fudan University. Retrieved August 16, 2022, from https://greenfdc.org/countries-of-the-belt-and-road-initiative-bri

  4. Gerstel, D. (2018). It’s a (debt) trap! Managing China-IMF cooperation across the Belt and Road. New Perspectives in Foreign Policy, 16, 12-16.

    Google Scholar 

  5. Huang, Y. (2016). Understanding China’s Belt & Road Initiative: Motivation, framework and assessment. China Economic Review, 40, 314–321.

    Article  Google Scholar 

  6. Tekdal, V. (2018). China’s Belt and Road Initiative: At the crossroads of challenges and ambitions. The Pacific Review, 31(3), 373-390.

    Article  Google Scholar 

  7. Yu, H. (2017). Motivation behind China’s ‘One Belt, One Road’ Initiatives and establishment of the Asian Infrastructure Investment Bank. Journal of Contemporary China, 26(105), 353-368.

    Article  Google Scholar 

  8. Oakes, T. (2021). The Belt and Road as method: Geopolitics, technopolitics and power through an infrastructure lens. Asia Pacific Viewpoint, 62(3), 281-285.

    Article  Google Scholar 

  9. Schuman, M. (2019, April 24). The U.S. can’t make allies take sides over China. The Atlantic. Retrieved August 16, 2022, from https://www.theatlantic.com/international/archive/2019/04/us-allies-washington-china-belt-road/587902

  10. Zhou, W., & Esteban, M. (2018). Beyond balancing: China’s approach towards the Belt and Road Initiative. Journal of Contemporary China, 27(112), 487-501.

    Article  Google Scholar 

  11. Sharma, P. S., & Khatri, R. S. (2019). The politics of soft power: Belt and Road Initiative (BRI) as charm influence in South Asia. China and the World, 2(1), 1950002.

    Article  Google Scholar 

  12. Reeves, J. (2018). Imperialism and the Middle Kingdom: The Xi Jinping administration’s peripheral diplomacy with developing states. Third World Quarterly, 39(5), 976-998.

    Article  Google Scholar 

  13. Li, R., & Cheong, K. C. (2019). “Going out”, going global, and the Belt and Road. In: China’s State Enterprises. Palgrave Macmillan.

  14. Cabestan, J-P. (2019). Beijing’s ‘going out’ strategy and Belt and Road Initiative in the Sahel: The case of China’s growing presence in Niger. Journal of Contemporary China, 28(118), 592-613.

    Article  Google Scholar 

  15. Chen, M. X., & Chuanhao, L. (2018). Foreign investment across the Belt and Road: Patterns, determinants, and effects. World Bank Policy Research Working Paper 8607.

  16. OECD. (2018). The Belt and Road Initiative in the global trade, investment and finance landscape. OECD Business and Finance Outlook 2018, OECD Publishing.

  17. Ferdinand, P. (2016). Westward ho—the China dream and ‘One Belt, One Road’: Chinese foreign policy under Xi Jinping. International Affairs, 92(4), 941-957.

    Article  Google Scholar 

  18. Coenen. J., Bager, S., Meyfroidt, P., Newig, J., & Challies, E. (2021). Environmental governance of China’s Belt and Road Initiative. Environmental Policy and Governance, 31(1), 3-17.

    Article  Google Scholar 

  19. Bräutigam, D., & Hwang, J. (2016). China-Africa loan database research guidebook. China Africa Research Initiative, Johns Hopkins University.

    Google Scholar 

  20. Chellaney, B. (2017, January 23). China’s debt trap diplomacy. Project Syndicate. Retrieved August 16, 2022, from https://www.project-syndicate.org/commentary/china-one-belt-one-road-loans-debt-by-brahma-chellaney-2017-01?barrier

  21. Behuria, A. K. (2018). How Sri Lanka walked into a debt trap, and the way out. Strategic Analysis, 42(2), 168-178.

    Article  Google Scholar 

  22. Jones, L., & Zeng, J. (2019). Understanding China’s ‘Belt and Road Initiative’: Beyond ‘grand strategy’ to a state transformation analysis. Third World Quarterly, 40(8), 1415-1439.

    Article  Google Scholar 

  23. Loughlin, N., & Grimsditch, M. (2021). How local political economy dynamics are shaping the Belt and Road Initiative. Third World Quarterly, 42(10), 2334-2352.

    Article  Google Scholar 

  24. Summers, T. (2016). China’s ‘new Silk Roads’: Sub-national regions and networks of global political economy. Third World Quarterly, 37(9), 1628-1643.

    Article  Google Scholar 

  25. Dollar, D. (2019, September). Understanding China’s Belt and Road infrastructure projects in Africa. Brookings. Retrieved August 16, 2022, from https://www.brookings.edu/research/understanding-chinas-belt-and-road-infrastructure-projects-in-africa

  26. Singh, A. (2021). The myth of ‘debt-trap diplomacy’ and realities of Chinese development finance. Third World Quarterly, 42(2), 239-253.

    Article  Google Scholar 

  27. Bräutigam, D. (2020). A critical look at Chinese ‘debt-trap diplomacy’: The rise of a meme. Area Development and Policy, 5(1), 1-14.

    Article  Google Scholar 

  28. Carmody, P. (2020). Dependence not debt-trap diplomacy. Area Development and Policy, 5(1), 23-31.

    Article  Google Scholar 

  29. Hurley, J., Morris, S., & Portelance, G. (2018). Examining the debt implications of the Belt and Road Initiative from a policy perspective. Center for Global Development Policy Paper 121.

  30. Pomfret, J. (2018, August 27). China’s debt traps around the world are a trademark of its imperialist ambitions. The Washington Post. Retrieved August 16, 2022, from https://www.washingtonpost.com/news/global-opinions/wp/2018/08/27/chinas-debt-traps-around-the-world-are-a-trademark-of-its-imperialist-ambitions

  31. Djankov, S. (2016). The rationale Behind China’s Belt and Road Initiative. In S. Djankov & S. Miner (Eds.), China’s Belt and Road Initiative: Motives, scope, and challenges (pp. 6-10). Peterson Institute for International Economics.

    Google Scholar 

  32. Hancock, T. (2017, May 13). China encircles the world with One Belt, One Road strategy. Financial Times. Retrieved August 16, 2022, from https://www.ft.com/content/0714074a-0334-11e7-aa5b-6bb07f5c8e12

  33. Glaeser, E., Huang, W., Ma, Y., & Scleifer, A. (2017). A real estate boom with Chinese characteristics. Journal of Economic Perspectives, 31(1), 93-116.

    Article  Google Scholar 

  34. Lou, Y., Xue, Q., & Han, B. (2010). How emerging market governments promote outward FDI: Experience from China. Journal of World Business, 45(1), 68-79.

    Article  Google Scholar 

  35. Deloitte. (2018). Embracing the BRI ecosystem in 2018: Navigating pitfalls and seizing opportunities. Deloitte.

  36. Gelpern, A., Horn, S., Morris, S., Parks, B., & Trebesch, C. (2021). How China lends: A rare look into 100 debt contracts with foreign governments. Peterson Institute for International Economics, Kiel Institute for the World Economy, Center for Global Development, and AidData at William & Mary.

  37. World Bank. (2019). Belt and Road economics: Opportunities and risks of transport corridors. The World Bank.

  38. Ghossein, T., Hoekman, B., & Shingal, A. (2018). Public procurement in the Belt and Road Initiative. World Bank MTI Discussion Paper No. 10.

  39. European Union Chamber of Commerce in China. (2020). The road less travelled: European involvement in China’s Belt and Road Initiative. European Union Chamber of Commerce in China.

  40. Chandran, N. (2018, September 14). China can make its Belt and Road project more successful if it taps locals, experts say. CNBC. Retrieved October 4, 2022, from https://www.cnbc.com/2018/09/14/china-must-do-more-to-tap-locals-in-belt-and-road-initiative-panel.html

  41. Qiu, L. D., & Tao, Z. (2001). Export, foreign direct investment, and local content requirement. Journal of Development Economics, 66(1), 101-125.

    Article  Google Scholar 

  42. Morris, S. (2019). The Kunming-Vientiane railway: The economic, procurement, labor, and safeguards dimensions of a Chinese Belt and Road project. Center for Global Development Policy Paper 142.

  43. Hillman, J., & Tippett, A. (2021, July 6). Who built that? Labor and the Belt and Road Initiative. Council on Foreign Relations. Retrieved August 16, 2022, from https://www.cfr.org/blog/who-built-labor-and-belt-and-road-initiative

  44. Jayaram, K., Kassiri, O., & Sun, I. Y. (2017, June 28). The closest look yet at Chinese economic engagement in Africa. McKinsey & Company. Retrieved August 16, 2022, from https://www.mckinsey.com/featured-insights/middle-east-and-africa/the-closest-look-yet-at-chinese-economic-engagement-in-africa

  45. Small, A. (2015). The China-Pakistan axis: Asia’s new geopolitics. Oxford University Press.

    Book  Google Scholar 

  46. Chauhan, P. (2019). Energy dimension of the Belt and Road Initiative: Implications for India’s energy security. India Journal of Asian Affairs, 32(1/2), 119-152.

    Google Scholar 

  47. Jones, A. (2020). China to complete its answer to GPS with Beidou navigation satellite launches in March, May. Space News. Retrieved November 8, 2021, from https://spacenews.com/china-to-complete-its-answer-to-gps-with-beidou-navigation-satellite-launches-in-march-may

  48. Abi-Habib, M. (2018, June 25). How China got Sri Lanka to cough up a port. The New York Times. Retrieved August 16, 2022, from https://www.nytimes.com/2018/06/25/world/asia/china-sri-lanka-port.html

  49. Samaranayake, N. (2021, March 2). Chinese Belt and Road Investment isn’t all bad—or good. Foreign Policy. Retrieved August 16, 2022, from https://foreignpolicy.com/2021/03/02/sri-lanka-china-bri-investment-debt-trap

  50. Assef, N. A. (2018). China’s Belt & Road Sri Lankan projects - white elephants or strategic dormant assets? SSRN. https://ssrn.com/abstract=3182351

  51. Bräutigam, D., & Rithmire, M. (2021, February 6). The Chinese ‘debt trap’ is a myth. The Atlantic. Retrieved August 16, 2022, from https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953

  52. Kavirathna, C. A., Hanaoka, S., Kawasaki, T., & Shimada, T. (2021). Port development and competition between the Colombo and Hambantota ports in Sri Lanka. Case Studies on Transport Policy, 9(1), 200-211.

    Article  Google Scholar 

  53. Frayer, L. (2019, December 13). In Sri Lanka, China’s building spree is raising questions about sovereignty. NPR. Retrieved August 16, 2022, from https://www.npr.org/2019/12/13/784084567/in-sri-lanka-chinas-building-spree-is-raising-questions-about-sovereignty

  54. Hundlani, D., & Kannangara, P. (2020, May 7). The Belt and Road in Sri Lanka: Beyond the debt trap discussion. The Diplomat. Retrieved August 16, 2022, from https://thediplomat.com/2020/05/the-belt-and-road-in-sri-lanka-beyond-the-debt-trap-discussion

  55. Samath, F. (2008, October 5). Chinese, Sri Lankan workers mingle at sprawling Hambantota port site. The Sunday Times. Retrieved August 16, 2022, from https://www.sundaytimes.lk/081005/FinancialTimes/ft343.html

  56. Vallejo, M. C., Espinosa, B., Venes, F., López, V., & Anda, S. (2019). Evading sustainable development standards: Case studies on hydroelectric projects in Ecuador. Boston University Global Development Policy Center, GEGI working paper 019.

  57. Geodata. Coca Codo Sinclair (CCS) hydroelectric project. Retrieved August 16, 2022, from https://www.geodata.it/en/sectors/portfolio-hydro/item/coca-codo-sinclair-ccs-hydroelectric-project.html

  58. Snell, S. (2015). China’s development finance: Outbound, inbound, and future trends in financial statecraft. U.S.-China Economic and Security Review Commission, Staff Research Report.

  59. Casey, N., & Krauss, C. (2018, December 24). It doesn’t matter if Ecuador can afford this dam. China still gets paid. The New York Times. Retrieved August 16, 2022, from https://www.nytimes.com/2018/12/24/world/americas/ecuador-china-dam.html

  60. Deniz, R., & Borja, S. (2017, October 22). China: A demanding partner for Ecuador and Venezuela. Diálogo Chino. Retrieved August 16, 2022, from https://dialogochino.net/en/trade-investment/9830-china-a-demanding-partner-for-ecuador-and-venezuela

  61. Power Technology. Coca Codo Sinclair hydroelectric project. Power Technology. Retrieved August 16, 2022, from https://www.power-technology.com/projects/coca-codo-sinclair-hydroelectric-project

  62. Nathanson, M. (2017, November 22). Damming or damning the Amazon: Assessing Ecuador/China cooperation. Mongabay. Retrieved August 16, 2022, from https://news.mongabay.com/2017/11/damming-or-damning-the-amazon-assessing-ecuador-china-cooperation

  63. Pelcastre, J. (2019, February 15). China builds hydroelectric plant with cracks in Ecuador. Diálogo. Retrieved August 16, 2022, from https://dialogo-americas.com/articles/china-builds-hydroelectric-plant-with-cracks-in-ecuador

  64. Cardona, A. J. P. (2020, May 6). Massive erosion likely due to hydropower dam causes oil spill on Ecuador’s Coca River. Mongabay. Retrieved August 16, 2022, from https://news.mongabay.com/2020/05/massive-erosion-likely-due-to-hydropower-dam-causes-oil-spill-on-ecuadors-coca-river

  65. Kraul, C. (2018, December 10). Ecuador faces a huge budget deficit because of loans it received from China. The Los Angeles Times. Retrieved August 16, 2022, from https://www.latimes.com/world/la-fg-ecuador-loans-china-20181210-story.html

  66. Kacungira, N. (2017, June 8). Will Kenya get value for money from its new railway? BBC. Retrieved August 16, 2022, from https://www.bbc.com/news/world-africa-40171095

  67. World Bank – Africa Transport Unit. (2013). The economics of the rail sauge in the East Africa community.

  68. Rumpel, R. (2017, June 20). Lessons from Kenya’s new, Chinese-funded railway. Chatham House. Retrieved August 16, 2022, from https://www.chathamhouse.org/2017/06/lessons-kenyas-new-chinese-funded-railway

  69. Dreher, A., Fuchs, A., Parks, B., Strange, A., & Tierney, M. J. (2021). Aid, China, and growth: Evidence from a new global development finance dataset. American Economic Journal: Economic Policy, 13(2), 135-174.

    Google Scholar 

  70. Nyabiage, J. (2020, June 23). Contract for Kenya’s China-funded railway ruled ‘illegal.’ South China Morning Post. Retrieved August 16, 2022, from https://www.scmp.com/news/china/diplomacy/article/3090225/contract-kenyas-china-funded-railway-ruled-illegal

  71. Wissenbach, U., & Wang, Y. (2017). African politics meets Chinese engineers: The Chinese-built standard gauge railway project in Kenya and East Africa. China Africa Research Initiative, School of Advanced International Studies Working Paper No. 2017/13.

  72. Nyabiage, J. (2021, March 15). Belt and Road Initiative: End of the line for China’s Afristar rail firm in Kenya? South China Morning Post. Retrieved August 16, 2022, from https://www.globalconstructionreview.com/news/kenya-take-over-chinese-operated-rail-line-five-ye

  73. Taylor, I. (2020). Kenya’s new lunatic express: The standard gauge railway. African Studies Quarterly, 19(3-4), 29-52.

    Google Scholar 

  74. Olander, E. (2020, September 28). Is default the next step for Kenya’s embattled standard gauge railway? The China Africa Project. Retrieved August 16, 2022, from https://chinaafricaproject.com/2020/09/28/is-default-the-next-step-for-kenyas-embattled-standard-gauge-railway

  75. Kyabiage, J. (2021, January 20). Kenya seeks debt relief from China as railway loan deadline looms. South China Morning Post. Retrieved August 16, 2022, from https://www.scmp.com/news/china/diplomacy/article/3118379/kenya-seeks-debt-relief-china-railway-loan-deadline-looms

  76. Eder, T. S. (2019, April 24). Belt and Road forum: “Chinese companies are clearly the main beneficiaries of BRI projects.” Mercator Institute for Chinese Studies. Retrieved October 11, 2022, from https://merics.org/en/press-release/belt-and-road-forum-chinese-companies-are-clearly-main-beneficiaries-bri-projects

  77. Sweet, R. (2018, September 5). EU criticises China’s “Silk Road”, and proposes its own alternative. Global Construction Review. Retrieved October 11, 2022, from https://www.globalconstructionreview.com/eu-criticises-chinas-silk-road-and-proposes-its-ow

  78. Wei, L. (2022, September 26). China reins in its Belt and Road Program, $1 trillion later. The Wall Street Journal. Retrieved October 4, 2022, from https://www.wsj.com/articles/china-belt-road-debt-11663961638

  79. Jardine, B. (2019, October 16). Why are there anti-China protests in Central Asia? The Washington Post. Retrieved October 4, 2022 from https://www.washingtonpost.com/politics/2019/10/16/why-are-there-anti-china-protests-central-asia

  80. Small, A. (2018). The backlash to Belt and Road. Foreign Affairs. Retrieved October 4, 2022, from https://www.foreignaffairs.com/articles/china/2018-02-16/backlash-belt-and-road

  81. Beech, H. (2018, August 20). ‘We cannot afford this’: Malaysia pushes back against China’s vision. The New York Times. Retrieved October 11, 2022, from https://www.nytimes.com/2018/08/20/world/asia/china-malaysia.html

  82. Bradsher, K. (2020, January 15). China renews its ‘Belt and Road’ push for global sway. The New York Times. Retrieved October 11, 2022, from https://www.nytimes.com/2020/01/15/business/china-belt-and-road.html

  83. Gamso, J. (2019). China’s ivory bans: Enhancing soft power through wildlife conservation. International Affairs, 95(6), 1389-1402.

    Article  Google Scholar 

  84. Shambaugh, D. (2015). China’s soft-power push: the search for respect. Foreign Affairs, 94(4), 99-107.

    Google Scholar 

  85. Malik, A., Parks, B., Russell, B., Lin, J., Walsh, K., Solomon, K., Zhang, S., Elston, T., and S. Goodman. (2021). Banking on the Belt and Road: Insights from a new global dataset of 13,427 Chinese development projects. Williamsburg, VA: AidData at William & Mary.

Download references

Acknowledgements

Earlier versions of this article were presented at meetings of the American Political Science Association, the International Studies Association, and the Midwest Political Science Association, as well as the Conference on Great Power Competition in the 21st Century at the Lawrence Livermore National Laboratory. The authors thank participants in those panels. The authors also thank Haley Burns, Kat Consador, Steve Juarez, June Obata, Sneha Pujani, Lily Sarvestani, Kaitlin Showers, and Rebecca Swyers for excellence research assistance. Finally, the authors thank the editor and reviewers for thoughtful comments and suggestions during the review process.

Author information

Authors and Affiliations

  1. Thunderbird School of Global Management, Arizona State University, 401 North 1St Street, Phoenix, AZ, 85004, USA

    Jonas Gamso & Michael H. Moffett

Authors
  1. Jonas Gamso
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Michael H. Moffett
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Jonas Gamso.

Ethics declarations

Declarations

The research did not involve human or animal subjects.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Gamso, J., Moffett, M.H. Unraveling the Belt and Road Initiative: China’s “Building Out” Strategy. East Asia 40, 21–36 (2023). https://doi.org/10.1007/s12140-022-09394-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s12140-022-09394-1

Keywords

Search

Navigation