The Belt and Road Initiative (BRI) or the Silk Road Economic Belt is essentially an overland route for road and rail transportation for countries in Europe, Asia and Africa. The infrastructure was developed by the Chinese President, Xi Jinping, and was designed to strategically form a connection for transport routes between continents. Despite this intention, some believe that the Belt and Road was created to enhance and dominate the trade network that appears to be China-centred.
It was widely known as the One Belt and One Road Initiative in England up until 2016. However, the Chinese government were concerned this title would cause heavy misinterpretation, and therefore decided to alter the name to its current name.
The transportation development is estimated to cost more than £760bn ($1tn) upon completion, although it is thought that these estimated figures could differ due to the unknown full amount of money already spent. According to research, China has invested more than $210bn towards the Belt and Road, which has mostly contributed towards work in Asia.
Where does the Belt and Road pass through?
The Belt and Road involves East Asia, Southeast Asia, Central Asia, Middle East and North Africa, South Asia and Europe, passing through a total of 65 countries. If you would like to view the countries involved, see here.
What does this infrastructure mean
for freight and trade?
One of the main reasons the Belt and Road was implemented was to provide routes for transportations, predominantly for trade purposes and the movement of goods. This has created a hub for freight and shipments across the globe, supplying the logistics industry with a mutual route for all the countries involved in the infrastructure agreement. Therefore, this connection could provide import and export loads with larger opportunities and a smoother process for the trade supply chain.
On the other hand, there are concerns that the Chinese government have gained leverage over countries in terms of economic growth and trade through organising this worldwide infrastructure. Already being the world’s leading largest trade economy, China’s power could be fed with these overland routes. Furthermore, some are threatened that the Chinese commercial existence may exert its power in military forces. The Belt and Road could become an opportunity for military transportation, and it has been reported that all ports being built will be for both commercial and military uses. Jonathan Hillman, Director of the Reconnecting Asia project at CSIS voices ‘if it can carry goods, it can carry troops.’
Are there any risks?
In short: yes. It takes a lot of money to build an internationally-connecting transport route, and Sri Lanka already seems to have trust issues with payments, after a Chinese company failed to smoothly pay for a 99-year lease. According to the Center for Global Development, eight other Belt and Road countries are at a high risk of not being able to repay their debts.
However, some believe that the Belt and Road innovation is the biggest investment project in history, covering over 68 countries. This includes 65% of the world’s population and 40% of the world’s GDP as of 2017.
What does the future look like?
Due to the agreement of loyalty to President Xi, it is highly likely that the Belt and Road infrastructure is going to continue.
The agreement between Xi and the countries involved is that Xi is granted the continuation of the Belt and Road for as long as he wishes.
Regarding future plans, China intend to set up international courts at the former hub of the original Silk Road, in hope to resolve business-related disputes related to Belt and Road. The Guardian’s research suggests that legal experts confirmed that the courts are likely to be modelled on the Dubai International Financial Centre Courts and the International Commercial Court in Singapore. These financial courts already have granted an agreement with China in aid to resolve the Belt and Road related feud. Despite this, there are worries that the courts (who conventionally answer to China’s governing communist party) will favour Chinese parties over other foreign organisations.
Rachel Jefferies, Editor, FORWARDER magazine