New GEGI Global China Working Papers on the Belt and Road Initiative
The Belt and Road Initiative: Domestic Politics and Global Finance
China’s Belt and Road Initiative (BRI) has faced considerable debate both at home and abroad since its announcement in late 2013. According to the Global Development Policy Center’s (GDP Center) database on China’s Global Energy Finance, Chinese policy banks have provided $225.8 billion in development finance to the energy sector for foreign governments since 2000. While this investment helps to bridge much needed infrastructure gaps in the recipient countries, many China watchers are concerned about the geopolitical implications, the potential for environmental damage, and the social instability of this initiative.
Two new GDP Center Working Papers explore the nature of Chinese international development finance and the Belt and Road Initiative from a comparative perspective. Both quantitative and qualitative research finds that contrary to conventional beliefs that China’s global development finance and the BRI are geopolitical tools, they are more market-driven and domestic-driven – likely even more so than their counterparts in other countries.
Min Ye analyzes the BRI from a domestic perspective through lenses of the BRI’s historical and political context. Her analysis of Chinese domestic politics shows that the motivations behind BRI predate the current leadership, the initiative continues to be dominated by leaders that prioritize domestic development, and international observers should not ignore the domestic role of the BRI, which is commonly used by state agents and local governments as a discourse leverage to finance their own development needs.
Junda Jin compares China’s policy banks with state-owned policy banks of other countries. He Jin finds that the Chinese banks exhibit similar concerns for recipients’ countries domestic economies, as well as risk seeking tendencies. Further, he concludes that China’s energy loans have a greater correlation to its own growing energy dependence than Japan.