How China benefit from Belt Road Initiative

Unlike the twentieth-century maritime silk route dreams, Xi’s ‘One Belt One Road’ – embarked

on by China in 2013 – visualises trade belts cutting through continents and redefining the old

trading routes. On the domestic front, it solves one of the most crucial economic problems of

China, namely, the excess industrial capacity; on the regional level, it contributes to the

mobilisation of the underdeveloped western provinces into world markets; on the international

level, it guarantees main resources by investing in strategic infrastructures. By investigating the

genesis of the BRI and the resultant outcome we are in a position to appreciate the far-reaching

effects of this phenomenal concept on global business, economy, and diplomatic term. (Sjoholm,

2022)

The promotion of industrial capacity cooperation between nations is among the major objectives

of the BRI and one of the major motivations that have led to the creation of the grand project is

industrial overcapacity that China has been grappling with. Problems that have arisen due to the

fast-paced development of industrial operations in China and the resulting excess production

capacity primarily on steel, cement and aluminum industries. Excess capacities are addressed

through the BRI by pushing infrastructure projects in foreign countries thereby not only

maintaining domestic industries but creating demand elsewhere (Ruta, 2018).

In the first instance, excess capacity in industrial activities in China require external outlets

where the excess production could be sold. For instance, China has been flooding the market

with its products, particularly steel, than it can meet inside this country, hence the BRI presents a

market for the country’s excess products. Many developing participating countries need railways,
ports, and highways investment, these public infrastructure mainly use a lot of steel; so, this

creates a vast market for imported Chinese steel (World Bank, 2018; Ruta, 2018).

Secondly, the BRI facilities allow China to transfer its manufactured goods as well as

construction services, creating new economic opportunities and jobs for domestic workers.

Major firms from China such as the China Railway Construction Corporation (CRCC) and the

China Communications Construction Company (CCCC) have benefited most from these deals as

they secured massive contracts and business opportunities from BRI related projects. This

international expansion assists those companies to continue, and also retain employments in

China (He, 2019; World Bank, 2018).

Thirdly, through investing in foreign infrastructures, China also expands its economic influence

in the foreign nation, which in the long-term can translate into improved economic and possibly

strategic gains. For example, CPEC not only provide capacity for China’s surplus industrial

capacity, but also enhance China’s power in south Asia which opens fresh Markets and strategic

partnerships channels (Ruta, 2018; He, 2019).

Another influential reason for the BRI is to deal with the problem of excess capacity in industries

that are critically important in China. China has gone through vigorous industrialization in the

last few decades, which have resulted in a production capacity glut especially in steel, cement

and aluminum industries. It provides an outlet to the excess capacities by facilitating

infrastructure investments overseas thus maintaining the domestic industries as well as boosting

the global demand (Ruta, 2018).

Firstly, China is exposed to industrial overcapacity, which requires the search for external outlets

through which the excess products would be sold. For instance, China’s steel industry produces
much more than what domestic clientele demand, hence, the BRI holds the solution. Export

markets: The participating countries Railways, ports, and highways under construction need

large quantity of steel hence will always present a market for Chinese steel (World Bank, 2018;

Ruta, 2018).

Second, the BRI provides China with an opportunity to export industrial products and render

construction services to develop the economy and create jobs in other nations. Many Chinese

business entities, especially in the construction and infrastructure sectors have benefited

immensely from BRI through contract awards and business opportunities; some of the companies

are China Railway Construction Corporation (CRCC) and China Communications Construction

Company (CCCC). It assists in sustaining these firms and supports the employment in China

(He, 2019; World Bank, 2018).

Thirdly, by investing in infrastructure abroad, therefore expanding China’s overseas assets, the

country also improves its position in the global economy, thus getting potentially long-term

economic and geopolitical gains. For instance, the CPEC, which involves the construction of

infrastructure and industries, not only helps to deal with China’s excess industrial capacity but

also helps in enhancing the geopolitical presence of China in South Asia that in turn provides it

with market to sell its products and establish strategic partnerships (Ruta, 2018; He, 2019).

Lastly, the growth of regional infrastructure with China at the hub positions the country as a

critical player in regional development, increasing its geopolitical influence and securing

advantageous trade terms with participating countries. By developing infrastructure such as

roads, railways, and ports, China effectively integrates itself into the economic fabric of partner

countries, making these countries more reliant on Chinese goods and services (The BRI at ten:

Maximizing the benefits and minimizing the risks of China’s belt and road initiative. (n.d.). .
(Sjöholm, 2022).. This strategic positioning enhances China's centrality in regional trade

networks and amplifies its political leverage over partner countries, thereby cementing its role as

a dominant regional power (The BRI at ten: Maximizing the benefits and minimizing the risks of

China’s belt and road initiative. (n.d.).

These factors collectively demonstrate how the BRI's strategic projects contribute to China's

economic and political ascent on the global stage, providing substantial benefits that align with

its long-term national interests.

Finally, the emergence of regional construction with China in the center contributes to the

country’s geopolitical status and, by agreeing on favorable trade terms with participating

countries, strengthens its geopolitical position. By developing infrastructure such as roads,

railways, and ports, China effectively integrates itself into the economic fabric of partner

countries, making these countries more reliant on Chinese goods and services (The BRI at ten:

Strategies for the optimization of profit and operational risk control concerning the China belt

and road project. (n. d. ). .(Sjöholm, 2022). .This strategic positioning enhances China's

centrality in regional trade networks and amplifies its political leverage over partner countries,

thereby cementing its role as a dominant regional power (The BRI at ten: How to optimise the

gains and mitigate the impact associated with China’s Belt and Road Initiative. (n. d. ).

Combined, these factors provide evidence showing that the BRI’s strategic projects assist China

in attaining a higher status in the international system by offering advantages that correlate to

China’s political and economic interests.

The BRI, spearheaded by the Chinese government in 2013, has influenced infrastructure and

development around the world, with more than sixty countries in Africa, Asia, Europe, the

middle East and South America. This megaproject estimated to cost around $1trillion is billed by
Beijing not just to support trade since China’s internal growth slows down but to directly bring

more political power to Beijing in the world. Thus, through BRI China seeks to establish new

relevant regions interested in economic collaboration, which is translated into political power.

In the politicalaspect, the BRI has played a role in many countries endorsing China

diplomatically as demonstrated by Panama, Dominica and Honduras looking to switch from

Taiwan to China. Some of the sources include : Sharma & Khatri, 2019 Chang 2023

This shift is key in demonstrating that economic interests indeed compel major changes in

political alignment and further strengthens China’s political position on the sensitive regional

matter including the Taiwan issue.

Furthermore, it is pertinent to assert that China has been undertaking strategic investments in

infrastructure and has thereby achieved vast influence over global organizations inclusive of the

United Nations along with geopolitical bodies including the BRICS countries inclusive of Brazil,

Russia, India, China and South Africa. For instance, countries receiving investments from China

help Beijing in defending its policies and projects within global institutions and forums, which in

itself assists in projecting China’s voice on the international stage.

Moreover, the BRI extends China’s market reach and tying strategic regions to Beijing through

trade and investment, which equates to power and influence, through a transportation

infrastructure silk road that runs through Southeast Asia, Central Asia, Africa, and Europe. This

geopolitical strategy not only helps ensure real assets such as oil and natural gas pipelines, but

also transforms China into the core of regional economic and political frameworks. For instance

in Africa, China uses its investments to secure political blessings which in turn means support
voices for China in international organisation. Some of the literature from the previous years are

reviewed below; (Sharma & Khatri, 2019) (Chang,2023)

Furthermore, the BRI has facilitated China's efforts to build coalitions of political and business

elites in participating countries who have vested interests in maintaining strong ties with Beijing.

These relationships can lead to favorable policy decisions that align with China's strategic

interests. The extensive network of BRI projects serves as a platform for China to promote its

model of governance and development, thereby enhancing its soft power and shaping global

norms in ways that favor its long-term geopolitical objectives.(Chang,2023)

Additionally, the BRI's role in fostering development and connectivity aligns with China's

broader diplomatic goals, portraying it as a champion of globalization and multilateral

cooperation. This image bolsters China's diplomatic efforts and helps to counterbalance

narratives that depict it as an authoritarian state seeking global dominance. By contributing to the

economic development of participating nations, China cultivates a positive image that can

mitigate criticism and foster a more favorable international environment for its rise as a global

power.(Sharma & Khatri, 2019) (Chang,2023)

Furthermore, the BRI has provided China with the necessary impetus to groom political and

business actors in the participating countries who have cardinal stakes in the continuing relations

with Beijing. Such relationships can culminate into beneficial policies of China’s strategic

importance as manifested by the Evergreen case. The Belt and Road Initiative projects constitute

a vast web where through China can spread its model of governance and development, can

increase its soft power and sow more favorable international norms for its strategic objectives.

(Chang,2023)
Furthermore, China’s ambitious diplomacy, paired with the BRI development agenda, ensures

the country portrays itself as promoting globalisation and multilateralism. This image supports

the Chinese diplomacy and aides in its attempts to challenge the perception of it as a country that

is seeks to wield hegemonic power over the world through authoritarian means. China’s

international image in this context is of a nation that is actively promoting the economic

development of participating nations, and which does not seek to undermine political stability

and the existing international order through its activities, in order to gain a more positive climate

on the international level for its process of becoming a great power. Cook and his team (Sharma

& Khatri, 2019) (Chang,2023)

The Belt and Road Initiative (BRI) launched by China in 2013 addresses China's domestic excess

industrial capacity, mobilizes underdeveloped regions, and guarantees vital resources through

international infrastructure investments. This initiative creates demand for Chinese products,

supports domestic industries, and secures jobs. Additionally, the BRI expands China’s economic

influence globally, offering strategic geopolitical gains and fostering international partnerships.

Politically, the BRI enhances China’s soft power and diplomatic leverage by promoting its model

of governance and aligning global norms with its strategic objectives. In conclusion, the BRI is a

multifaceted strategy that significantly impacts global business, economy, and diplomacy,

aligning with China's long-term national interests.

References links

- BRI projects improving lives in developing nations. (n.d.).

https://english.www.gov.cn/news/202309/20/content_WS650a4f44c6d0868f4e8df96f.ht

ml
- He, M. (2019). Belt and Road Initiative: Economic Effects and Risks
- Kapstein, E. B., & Shapiro, J. N. (2023, September 22). Does the BRI Increase China’s

Influence? Foreign Policy. https://foreignpolicy.com/2023/09/20/china-philippines-

malaysia-indonesia-southeast-asia-bri/

- Ruta, M. (2018). Three Opportunities and Three Risks of the Belt and Road Initiative.
World Bank Group.
- Ruta, M. (2024, March 16). Three Opportunities and Three Risks of the Belt and Road

Initiative. https://blogs.worldbank.org/en/trade/three-opportunities-and-three-risks-belt-

and-road-initiative

- Sharma, B. P., & Khatri, R. S. (2019b). The Politics of Soft Power:Belt and Road

Initiative (BRI) as Charm Influence in South Asia. China and the World, 02(01),

1950002. https://doi.org/10.1142/s2591729319500020

- Sjoholm, F. (2022). The Belt and Road Initiative: Economic Causes and Effects.Fredrik

Sjoholm.

- World Bank. (2018). Belt and Road Initiative: Economic Analysis and Risks.