Ten Years of the Belt and Road Initiative: Preliminary Results

In the 10 years since Chinese President Xi Jinping proposed the Silk Road Economic Belt and the 21^st Century Maritime Silk Road in 2013, which are the two pillars of the Belt and Road Initiative (BRI), many projects have seen the light of day in various regions of the world. Most of the projects that have been realized are in the field of energy and infrastructure. Most of the energy and transportation infrastructure have been built as part of project activities rather than as investment projects.

Because infrastructure needs, especially in developing countries, far outstrip supply, and alternative proposals are few and far between, the Initiative has proven attractive to many countries. The Initiative also outcompetes alternatives due to price competitiveness, financing terms or other factors.

As of June, 2023, 152 countries and 32 international organizations have signed more than 200 documents on jointly building the BRI. The degree of actual cooperation varies widely. Examples of major infrastructure projects include the Jakarta-Bandung High-Speed Railway in Indonesia, the Budapest-Belgrade railway in Hungary and Serbia, the China-Laos Railway, the Addis Ababa-Djibouti Railway, and the Mombasa-Nairobi Standard Gauge Railway, etc.

In the case of Russia, the formula chosen for cooperation with China has been to pair the Eurasian Economic Union (EAEU), an economic grouping comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, and the Silk Road Economic Belt as two equally important initiatives. The Russian leadership views the pairing of the EAEU and the Chinese initiative as an important component of the realization of the greater Eurasian partnership, a key Russian foreign policy concept.

From Russia's point of view, Chinese projects should contribute to the development of both individual member states and the grouping without changing the rules of the game within the EAEU or undermining this integration project. At the conceptual level, there is an understanding of the compatibility of the development agendas of the EAEU and the BRI, especially in energy, transportation interconnectivity, logistics, industry, agriculture, e-commerce, finance, and other areas.

An important task for the future for Russia is to sync the EAEU and the BRI, developing a roadmap and pointing to projects that could demonstrate its concrete content.

In the 10 years since Chinese President Xi Jinping proposed the Silk Road Economic Belt and the 21^st Century Maritime Silk Road in 2013, which are the two pillars of the Belt and Road Initiative (BRI), many projects have seen the light of day in various regions of the world. Most of the projects that have been realized are in the field of energy and infrastructure. Most of the energy and transportation infrastructure have been built as part of project activities rather than as investment projects.

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Under this model, Chinese state-owned companies carry out contracting and subcontracting works and provide everything from engineering and design services to construction materials and all necessary equipment. Financing is provided by the Chinese side in the form of loans, mostly from large Chinese state-owned banks and RMB loans. In addition, the Initiative includes other projects in other areas such as industry, real estate, finance, agriculture, logistics, telecommunications, and information technology (IT) among others. In the field of industry, it is mainly mining, construction materials, metallurgy, etc.

Because infrastructure needs, especially in developing countries, far outstrip supply, and alternative proposals are few and far between, the Initiative has proven attractive to many countries. The Initiative also outcompetes alternatives due to price competitiveness, financing terms or other factors.

As of June, 2023, 152 countries and 32 international organizations have signed more than 200 documents on jointly building the BRI. The degree of actual cooperation varies widely. Examples of major infrastructure projects include the Jakarta-Bandung High-Speed Railway in Indonesia, the Budapest-Belgrade railway in Hungary and Serbia, the China-Laos Railway, the Addis Ababa-Djibouti Railway, and the Mombasa-Nairobi Standard Gauge Railway, etc.

The BRI has led to the creation of new transport corridors or elements thereof, which have a few implications beyond increasing transregional connectivity. For China, these are orders for its infrastructure and telecommunications companies, as well as related industries (construction materials, steel, and related machinery). For China's partner countries, it is a stimulus to their economic development due to increased domestic and international logistics and passenger flows and the elimination of several obstacles to development (e.g., power shortages). In the case of investments in manufacturing, it is production capacity, or new solutions in the case of information communication technology infrastructure (such as 5G communications) or IT products.

In the case of Russia, the formula chosen for cooperation with China has been to pair the Eurasian Economic Union (EAEU), an economic grouping comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, and the Silk Road Economic Belt as two equally important initiatives. The Russian leadership views the pairing of the EAEU and the Chinese initiative as an important component of the realization of the greater Eurasian partnership, a key Russian foreign policy concept.

From Russia's point of view, Chinese projects should contribute to the development of both individual member states and the grouping without changing the rules of the game within the EAEU or undermining this integration project. At the conceptual level, there is an understanding of the compatibility of the development agendas of the EAEU and the BRI, especially in energy, transportation interconnectivity, logistics, industry, agriculture, e-commerce, finance, and other areas.

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The actual contours of the pairing, however, are still not clearly outlined: There is conceptual uncertainty as to what exactly should be considered as projects indicating progress in the pairing of the EAEU and the BRI. Cooperation with China takes place at the bilateral level. In 2018, China and the EAEU signed an agreement on trade and economic cooperation, which includes trade promotion, harmonization of procedures and rules, e-commerce agenda, etc. The agreement is not preferential and does not seriously change the parameters of interaction. It should also be noted that there are no major transportation infrastructure projects between China and Russia.

An important task for the future for Russia is to sync the EAEU and the BRI, developing a roadmap and pointing to projects that could demonstrate its concrete content.

With Russia reorienting its foreign trade from the European direction to the eastern and southern directions, there is a growing need to build new transportation and energy infrastructure. China is an extremely attractive partner for the realization of such projects. Multilateral projects involving China and the EAEU are also promising.

Finally, the creation of joint regional value chains is a highly sought-after goal in the context of technological limitations on the part of the West with respect to both China and Russia and the need of all Eurasian countries in economic development and technological modernization.

First published in the CGTN.