BRI and China’s Economic Prowess
By Amna Ejaz Rafi: Research Associate at Islamabad Policy Research Institute (IPRI), Pakistan 14-06-2026
China’s economic journey from state-led industrialization to international markets is an outcome of a capitalist development strategy. Initially, China tried to attract the foreign investment by inviting companies’ in the Special Economic Zones (SEZs). The SEZs in coastal areas of China gave an opportunity for the local companies to improve and match up with the international standards. This competition opened the doors for Chinese industry to outside markets, it also provided a base to link with international markets. This, in fact, was China’s first step towards globalisation. Since then, China’s economic profile has risen globally and China through trading ties has attained the membership of World Trade Organisation (WTO) and BRICS (Brazil, Russia, India, China and South Africa).
In the Asia Pacific context, China has an active participation in Association of Southeast Asian Nations (ASEAN), Asia Pacific Economic Cooperation (APEC) and Regional Comprehensive Economic Partnership (RCEP). Seeing China’s regional and global outlooks, the common denominator is trade linkages and regionalism. China’s preferred option of foreign policy engagement is geo-economics. China has trading ties with India (bilateral trade of US$ 151.1 billion), despite the border dispute (along the Himalayas). Similarly, China has stepped up political ties with Afghanistan with prime focus on economic development. China has invested in Afghanistan’s oil production (US$ 49 million). These developments promote China’s image as an economic developer. The socio-economic improvement speaks of the people-centric global economic development of BRI.
A significant aspect of BRI is geo-economics. The countries / regions landlocked, through BRI can connect with the world. This dimension of BRI can be seen in context of Central Asian states. The BRI integrates countries of Central Asia with a multi-faceted transportation network, connecting Central Asia to far-away countries and markets. Likewise, the Central Asian countries are significant for China’s connectivity to Europe, the Persian Gulf and the Mediterranean (China-Mongolia-Russia, China-Central Asia-West Asia and China-Indochina Peninsula economic corridors).
The BRI fosters connectivity on land (Silk Road Economic Belt) and sea (21st century Maritime Silk Road) among participants in the global political economy. With five land corridors and one maritime corridor, the BRI primarily seeks to integrate Eurasia and beyond with components in Africa, Oceania and the Americas. Its five priorities are policy coordination, facilities connectivity, unimpeded trade, financial integration, and people-to-people bonds. So far 150 countries from Asia, Africa and Europe have joined BRI.
This economic interdependence makes China a significant player of global supply chains. Developing as well as developed economies have joined BRI, and the initiative is an opportunity for the developing world to connect economically, industrialise and prosper.
The argument that China’s economic manoeuvering is geopolitically driven, and China through economic prowess is trying to gain influence globally cannot be denied altogether as with economic strength comes political power. However, the two aspects that need deliberation here are that China’s ascendancy to global political economy has been possible with the West’s support. China’s entry into WTO had support of the West, and it was the China-West trade cooperation that was instrumental in paving the way for China’s WTO membership. Thus, economic interest was the decisive factor in integration of Chinese economy with global economy. Secondly, seeing the prevalent scope of BRI, the initiative has made inroads in developing world. For instance, the building of highways, bridges, railways and seaports in Africa carry economic dividends. The ‘Mombasa-Nairobi Standard Gauge Railway’ in Kenya and the Port of Bagamoyo in Tanzanai are projects that will provide the African people with job opportunities. During the 3rd Belt and Road Forum (BRF) held in Beijing, in October 2023, it was announced that the BRI projects have generated 420,000 jobs, and lifted 40 million people out of poverty. This socio-economic improvement speaks of the “people-centric global economic development” of BRI
Another BRI project, likely to be instrumental in regional connectivity once operational is the China-Pakistan Economic Corridor (CPEC). CPEC will connect South Asia with East Asia and Central Asia. The economic connectivity will open-up prospects of industrialisation and trade cooperation. Afghanistan, the country having faced war for decades can be a major beneficiary of CPEC. It can serve as bridge between CPEC and Central Asian states. However, for projection of CPEC into Central Asia, peace in Afghanistan is a must. In this regard, institution building under Shanghai Cooperation Organization (SCO) and Central Asia Regional Economic Cooperation (CAREC) to strengthen communication linkages among the regional countries will be required.
Critics argue that the building of seaports in Asia (Pakistan, Sri Lanka and Myanmar) is more of a geopolitical move aimed at expanding China’s sphere of influence. China’s economic engagement with countries of Southeast and South Asia will enhance the former’s role in region. Due to the economic interests, the regional countries will support China’s regional presence. Thus, economic cooperation will define the region’s political orientation. Seeing the economic connectivity in context of South Asia, China’s economic ingress in region coupled with the economic benefits will be useful in balancing out the confrontational politics in region. South Asia’s connectivity with adjoining areas will strengthen prospects of trade, travel and technology transfer. Importantly, the regional connectivity will allow the energy deficit countries access to energy rich countries. This energy connectivity will promote inter-regional cooperation.
China’s Integration into World Economy
The global economic system derives its values from the West-led capitalist style, however, with China’s integration into the world economy, the global economy is gradually shifting towards a more multi-dimensional style of trading. The BRI and related institutions complement the existing order by providing alternatives, to lower dependency on the existing order. China through the BRI pledges to take responsibility as a major economy in the process of promoting economic globalisation and making it more inclusive and beneficial for all participants.
Chinese financing is actively contributing to rebalancing the global financial system. According to a report from AidData, a US based research lab, China provided US$ 462 billion in official finance to 164 countries between 2008 and 2019, surpassing the contributions of US$ 467 billion by the World Bank and US$ 89 billion by the IMF. Addressing concerns related to the potential debt trap within the BRI is pivotal and calls for a comprehensive understanding of the dynamics at play. It is true that a substantial portion of the financing within BRI initiatives takes the form of debt extended to member countries for their identical projects. However, it is essential to recognise that debt in itself is neither good nor bad. It is a financial tool whose value depends on how it is employed.
The BRI and the various financial institutions operating under its umbrella serve to address the deficiencies of weakening global financial institutions, which often attach numerous conditions and requirements to their financing for developing countries. These strings attached to traditional funding sources can limit the flexibility and suitability of the financing for the unique needs of recipient countries. In this context, it’s worth considering that had global financial institutions been more supportive of the developing world, alternative means of development cooperation like the BRI might not have been necessary. Nevertheless, it is important to underscore that ‘no strings attached’ financing, while seemingly advantageous, can pose a risk if borrowing governments do not exercise responsibility and maturity in managing the funds. Therefore, the responsibility for prudent fiscal management ultimately lies with the borrowing governments. They must ensure that the borrowed funds are deployed in a manner that enhances productivity and fosters inclusive growth. It is not entirely fair to attribute the blame for fiscal mismanagement solely to the BRI; it is a shared responsibility.
Seeing China’s geo-economic approach, the country has not limited BRI to Southeast Asia or larger Asia rather, BRI has access to far-off continents like Africa. Thereby, China’s vision of regional connectivity has a worldwide spectrum. Another unique characteristic of BRI is development of infrastructure and economic progress. The relocation of capital to developing countries, the flow of investments, and transfer of technology to developing world are the hallmark of China’s led capitalism strategy. The principle of inclusivity and collective progress as envisioned in BRI has in a way introduced a different style of capitalism, in which the developing countries development is prioritised through economic activities. Furthermore, to achieve collective progress, institutions like the Belt and Road Forum for International Cooperation (BRF), the Asian Infrastructure Investment Bank (AIIB), the China International Import Expo, China-Arab States Cooperation Forum, Asia-Europe Meeting (ASEM) Programme, and the China-Russia Expo have been established. These multilateral institutions have a significant role in integration of world regions / economies.
With the launch of BRI, China’s image has been branded as a global power. China has also won over the race of connectivity and is the lead country in infrastructural development and building of seaports. China through BRI will be connected with sixty countries on four continents. The sea component of BRI (Maritime Silk Road) will connect China and Europe crossing Southeast Asia, South Asia, the Middle East and East Africa.
China through economic engagements is trying to widen its geopolitical horizon within East Asia, and beyond. China continues to be the indispensable economic power in Asia Pacific. It proves the point that economic interdependence is pivotal in political relations. Moreover, China has taken over from the US in the economic realm, the regional countries tilt towards the US is primarily security centric. These developments foresee China’s emergence internationally. China has adopted the economic prowess as a tool to govern regionally and to expand globally. Meanwhile, the countries facing challenges of poverty, inequality and extremist tendencies look at BRI as a path to progress. In other words, China’s narrative of BRI and economic connectivity is in tune with the narrative of developing world’s quest for progress. Thus, the BRI may be seen as a peaceful pathfinder on the Chinese road to global power.
