At $1000bn, China’s Belt and Road Initiative is arguably the largest overseas investment drive ever launched by a single country. How are BRI projects across Asia and Europe progressing after a big spurt in activity following the maiden announcement of 2013? By Stefania Palma. 

In this special report, Building the Belt and Road, we look at how China’s Belt and Road Initiative (BRI) is unfolding in eight different countries: Indonesia, Sri Lanka, Kazakhstan, Pakistan, Bangladesh, India, Poland and Laos. The Banker’s editors have worked with our colleagues at sister publication Nikkei Asian Review to present this joint report to coincide with the 51st annual meeting of the Asian Development Bank (ADB) in Manila in May. This is the third year of our collaboration around the ADB meeting.

In the report, we give an overview of the major BRI projects in each country and assess how they are progressing. We also analyse how BRI projects are being financed across different markets. Do local financial institutions in host countries have the chance to participate in these initiatives?

We collaborated with the Center for Strategic and International Studies’ Reconnecting Asia Project to aggregate key BRI infrastructure initiatives worldwide. Some programmes are highlighted in the map below and more projects are illustrated in the report.

Construction slows

One common theme across different markets was a slowdown in the pace of BRI project construction. In Kazakhstan’s case, red tape and land reform are to blame. But Chinese FDI has still grown almost eightfold between 2014 and 2017.

In Bangladesh’s case, the country’s vast infrastructure needs and rapid growth make it an ideal partner for China, though the pace of BRI construction has slowed in part due to geopolitical tensions with neighbour India.

New Delhi has formally rejected the BRI on the basis that the China-Pakistan Economic Corridor (CPEC) passes through a piece of land claimed by both India and Pakistan. But analysts argue that some Chinese projects in India arguably fit the BRI definition anyway.

Across the border in Pakistan, we found enormous Chinese investment in the shape of CPEC, which includes the transformation of Gwadar port, but also growing concerns about Islamabad’s mounting deficits.

The question of deficit, as well as ballooning government debt, is at the heart of our coverage of Sri Lanka, which granted a 99-year lease on the port of Hambantota to China in the hope of cutting down its debt to Beijing.

Funding delays

Meanwhile, a key BRI project in Indonesia involves a $6bn rail line connecting Jakarta and Bandung, but a delay in fund disbursement by China Development Bank and slow land acquisition may keep the initiative off schedule.

The BRI touches another south-east Asian country, Laos, where a China-Laos joint venture company is financing a 414-kilometre train track linking the countries’ border to the Lao capital, Vientiane.

We also analysed the BRI from a European perspective, with an overview of how China could help Poland meet its infrastructure needs, especially since EU funds might decrease following the bloc's new budget.

Belt and road snapshot


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