The Belt and Road Initiative (BRI) was earlier known as One Belt One Road. It is a strategy launched by the People’s Republic of China to connect Asia with Africa and Europe via land and sea networks. This is to improve regional integration, increase commerce, and stimulate economic growth.

The Belt and Road Initiative (BRI) is an ambitious initiative to build two new economic routes connecting China to the rest of the globe. However, the programme is about much more than just infrastructure. This will be extremely beneficial in the upcoming UPSC preliminary and Mains examinations. 

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What is One Belt, One Road Initiative?

One Belt, One Road (OBOR) is also known as the Belt and Road Initiative (BRI). It is a global infrastructure development strategy adopted by the Chinese government in 2013. Its aim is to invest in more than 150 countries and international organizations. It is considered a centerpiece of the Chinese leader Xi Jinping's foreign policy. 

Source: World Bank

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Why is it named the Belt and Road Initiative (BRI)?

• The Belt and Road Initiative (BRI) is named after the ancient Silk Road. It is a network of trade routes that connected China to the rest of the world for over 1,500 years. The BRI seeks to revive these ancient trade routes and create new ones.
• The name "Belt and Road" is a reference to the two main components of the BRI: 
  • the Silk Road Economic Belt and 
  • the 21st Century Maritime Silk Road. 
• The Silk Road Economic Belt is a land-based route. It connects China to Central Asia, Europe, and the Middle East. 
• The 21st Century Maritime Silk Road is a sea-based route. It connects China to Southeast Asia, South Asia, Africa, and Europe.

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Objectives of One Belt One Road

• The Belt and Road Initiative is viewed as a critical component in the Chinese government’s efforts to revitalise the economies of the country’s core provinces, which have historically lagged behind richer coastal areas.
• The government uses the Belt and Road Initiative to stimulate and support businesses in these central regions, offering large budgets and pushing companies to compete for Belt and Road contracts.
• In that regard, it is comparable to the Marshall Plan that ended World War II — with the key distinction being that China assists other countries only based on common economic interests.

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Working Mechanism of One Belt One Road Initiative

• The BRI consists of a Silk Road Economic Belt, a land route connecting China to southeast Asia, south Asia, Central Asia, Russia, and Europe.
• It is a 21st-century Maritime Silk Road, a sea route connecting China’s coastal regions to southeast and south Asia, the South Pacific, the Middle East, and Eastern Africa to Europe.
• The initiative specifies five primary objectives:
  • Coordination of policies
  • Connectivity of infrastructure;
  • unhindered trade;
  • financial integration; and
  • connecting people
• The BRI has been linked to a massive investment programme in infrastructure development, including ports, roads, trains, airports, power plants, and telecommunications networks.
• Volumes of Chinese state-led BRI lending have been declining since 2019. The BRI now emphasizes “high-quality investment,” including increased use of project finance, risk mitigation techniques, and green finance.
• The Belt and Road Initiative (BRI) is becoming an increasingly important umbrella framework for China’s bilateral trade with BRI partners: as of March 2020, 138 nations had joined the BRI by entering into a Memorandum of Understanding (MoU) with China.

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Analysis of One Belt One Road

China witnessed rapid growth from the 1980s to the early 2000s, driven by increased production and investment from its integration into regional cross-border production networks.

However, the global financial crisis in 2008 and the subsequent decline in world trade had a negative impact on China's economy, especially due to its heavy reliance on export-oriented growth. In response, China recognized the need to develop a new economic strategy. The foundation of this strategy involved implementing a significant investment program funded through substantial money creation and low-interest rates.

The aim was to counter the effects of declining external demand and stimulate the economy through increased domestic investment. By formulating and implementing this plan, China hoped to mitigate the adverse impacts of reduced international demand and foster sustainable economic growth. The OBOR (One Belt, One Road) initiative aligns with China's foreign policy objectives, particularly in improving relations with neighboring countries, which various border disputes have strained.

The successful implementation of this initiative is expected to have positive long-term effects, including enhanced cross-border trade and increased financial inflows from the wider Eurasian regions.

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Advantages of One Belt One Road Initiative to India

• One Belt One Road Initiative is viewed as a danger to India’s sovereignty; however, the development of the Gilgit Baltistan region might diminish security challenges in India.
• India’s participation in the rest of the BRI strengthens her influence in decision-making to build the CPEC along lines that are beneficial to both India and Pakistan.
• Being a part of CPEC would allow India to direct trade in the oceans to a greater extent, which it has not been able to do with the existing infrastructure.
• As a result, India must consider economic reconnection with Pakistan while leaving the political matter on the back burner.
• The completion of CPEC is critical because a stable and economically robust Pakistan is required for peace and prosperity in the region; also, if India joined CPEC, it would have gained access to the POK region.

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Disadvantages of One Belt One Road Initiative to India

• China has assisted some of India’s neighbours, including Pakistan, Sri Lanka, and Bangladesh.
• India has avoided participating in the effort out of concern that it will increase China’s strategic position.
• The prospect of being saddled with debt is why India has remained away from the project thus far.
• Connectivity initiatives must adhere to financial responsibility guidelines to avoid projects that would create unsustainable debt loads on communities.
• Another source of concern for India is the projected China-Pakistan Economic Corridor (CPEC), which will run through Pakistan-occupied Kashmir (PoK).

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India’s Concern Over One Belt One Road

• India has seen One Belt One Road with respect and scepticism. India has opted out of the OBOR, citing sovereignty, procedural, and leadership concerns. The key reason for India’s non-participation is the CPEC, which runs through Pakistan-occupied Kashmir (PoK). China is thought to be sensitive to India’s claims over PoK.
• Certain decisions that have an impact on India and are interpreted as China’s undisguised ambition for hegemony include the signing of a maritime agreement with Sri Lanka, the sale of eight submarines to Pakistan, the expansion of facilities at Gwadar port, and the construction of a base in Djibouti in Africa.
• India has two major concerns.
  • The first objection concerns the CPEC, a flagship OBOR project connecting Xinjiang in China and Gwadar in Balochistan via PoK and Gilgit-Baltistan. It is a Chinese initiative taken on its own. India sees it as an attack on its sovereignty as well. India favours regional cooperation, but it also aspires to hegemony.
  • It is concerned that Gwadar will become a Chinese naval station. India anticipates that China will encourage all countries and organisations to participate constructively.
• India also has other challenges, such as competent Chinese-built infrastructure all the way up to its borders with Tibet, Nepal, Bhutan, and Bangladesh.

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How can India counter BRI?

• India has laid out its rebalancing plan in response to China’s Belt and Road Initiative (BRI), emphasizing the provision of soft loans for a variety of economic and capacity-building projects across continents.
• India's vigorous development cooperation program is important to its tight and multifaceted connections with many partner nations, particularly those in India’s immediate neighborhood.
• Concessional lines of credit (LOCs) from the Government of India (GoI) are an important component of this development partnership in various socioeconomic development areas such as power, transportation, connectivity, agriculture and irrigation, manufacturing industries, water and sanitation, and healthcare.
• India must accelerate its infrastructure projects and find methods to expand its area of influence. Here are three ways India might respond to China’s OBOR challenge:
  • First, India must improve internal connectivity, integrate the domestic market and link the country’s prosperous east coast to the interior provinces.
  • Second, according to the expert, India must modernize connections with neighboring nations across its land and sea borders.
  • Third, India should collaborate with countries like Japan and international agencies to strengthen regional connectivity in the Indian Subcontinent and beyond.

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Challenges Associated with OBOR in the South Asian Region

Tensions in geopolitics in the South Asian Region

• The Belt and Road Initiative (BRI) is a very Sino-centric approach that may assist small countries but not larger countries.
• The member states are embroiled in controversies and distrustful of one another. Chinese economic progress can transform the world's economic order, but it can also be unjust to smaller, developing countries.
• The biggest obstacle to this undertaking is the conflict or geopolitical friction with other powers, such as the United States.

Interference in Domestic Politics 

• OBOR countries are in economic transition. Economic growth will have an impact on these countries’ internal politics.
• Chinese companies may be unaware of political undercurrents, and unforeseen effects may occur.

Economic Dominance

• On the economic front, China has been chastised for using its vast financial assets to dominate smaller economies through long-term control of infrastructure, natural resources, and associated land assets and for offering less-than-desirable credit terms for infrastructure loans.

Focus on Chinese Interests

• The OBOR plan, particularly its projects along the Mekong River, all suit China’s interests.
• Most countries see China’s goals and actions as an attempt to dominate its neighbouring regions.
• Another obstacle is the region’s existing disputes and territorial issues with neighbours.

Production Capacity Cooperation

The ‘production capacity cooperation,’ which China hails as an essential component of OBOR, frequently entails the straightforward transfer of Chinese-owned production capacity to countries where production is less expensive and markets are closed.

• These processes may also result in China exerting some control over domestic markets, labour policies, and export policies.

China’s Strategic Programme

• China openly promotes OBOR as being based on and validating China’s claims to the islands of the South China Sea. At the same time, Djibouti provides China with a commerce port and its first overseas military station on the other side of the Indian Ocean.
• In China, it has been repeatedly stated that OBOR is also designed to serve as a regional security mechanism.

Designed to Counter the United States

• Broader concerns concern China’s long-term goals, with the potential that the OBOR programme aims to form a Eurasia-wide, China-led union to confront the US.
• As a result, some consider this project a significant challenge to the current global political and economic status quo.

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Future of the Belt Road Initiative

After the global impact of the COVID-19 pandemic, Chinese state banks shifted their focus to supporting domestic projects, following a trend seen worldwide. China has narrowed the scope of its international ambitions, concentrating on projects along its vast border and Southeast Asia. Investments abroad have significantly declined since reaching a peak in 2015. In September 2020, President Xi Jinping announced China's commitment to reaching peak CO2 emissions before 2030 and achieving carbon neutrality by 2060.

These announcements have tangible implications for Belt and Road investments. While China continues to invest in coal, there is also substantial investment in renewable energy sources like wind and solar power. The coming decade will determine the extent to which the Belt and Road Initiative drives green infrastructure, industry, and energy solutions. It will also provide a clearer understanding of the initiative's implications for the rest of the world.

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