China’s ambitious Belt and Road Initiative (BRI) has evolved significantly since its genesis in 2013, when it began as an infrastructure development program across the ancient Silk Roads of yesteryear. Today, the BRI is a modern global network of currency relationships, trade links, entrepreneurial investments, educational exchange programs and more. The rapid expansion of the BRI to a multitude of sectors and over 70 countries in the span of just six years has invited new risks as well as opportunities.
Building on the foundations of Navigating the New Silk Road Vol. 1, this BRINK Perspective’s edition benefits from the BRI’s recent track record of successes and challenges to provide timely insights on the initiative’s new evolutions. The compendium evaluates the BRI in three broad themes:
- China in Focus. The BRI offers China a crucial opportunity for diversifying its exports, internationalizing the yuan and combating stagnating demand. However, risks in the Chinese financial system remain, and present some threats to the sustainability of the BRI. Several instruments and policies may be used to mitigate against these risks, but only to a certain extent.
- Asia and Beyond. The BRI presents win-win scenarios in some parts of Asia and potential threats in others. From Singapore to the Philippines to India, China’s rising prominence as an investment and trade partner (amongst many other things) will both disrupt and engage. Looking beyond Asia, Western countries also need to grapple with their acceptance of the program.
- Wider Considerations. The expansion of the BRI has raised important questions around financial security and a broader sense of sustainability. With a broad presence across a variety of emerging market countries – many of which suffer from relatively low sovereign ratings, fragile public finances and weak regulations and standards around investments – serious uncertainties around several projects remain a concern.