– Covid-19 led to a slowdown in BRI projects
– Chinese overseas investment dropped off in 2020
– Government remains committed to the wide-ranging infrastructure programme
– Sustainability, health and digital to be the new cornerstones of the initiative
Following a year of coronavirus-related disruptions, China appears to be placing a greater focus on sustainable, digital and health-related projects in its flagship Belt and Road Initiative (BRI).
As OBG outlined in April last year, the onset of Covid-19 prompted questions about the future direction of the BRI.
Launched in 2013, the BRI is an ambitious international initiative that aims to revive ancient Silk Road trade routes through large-scale infrastructure development.
By the start of 2020 some 2951 BRI-linked projects – valued at a total of $3.9trn – were planned or under way across the world.
However, as borders closed and lockdowns were imposed, progress stalled on a number of major BRI infrastructure developments.
In June China’s Ministry of Foreign Affairs announced that 30-40% of BRI projects had been affected by the virus, while a further 20% had been “seriously affected”. Restrictions on the flow of Chinese workers and construction supplies were cited as factors behind project suspensions or slowdowns in Pakistan, Cambodia and Indonesia, among other countries.
Speculation about the programme’s sustainability intensified as the pandemic rolled on and Chinese overseas investment declined. By the end of the year, the Financial Times was questioning the long-term viability of the BRI, for reasons including a coronavirus-induced debt crisis, a global drop in overseas investment and US opposition to the project.
Nevertheless, rumours of its demise may well have been exaggerated: while Covid-19 has given rise to a rethink of some of the BRI’s key focus areas, it seems that China remains firmly committed to it.
In November Meng Wei, a spokesperson for the National Development and Reform Commission – responsible for overseeing BRI projects – insisted on the overarching project’s continuation, but sketched a reformed vision for its future, emphasising three aspects: the Green Silk Road, the Health Silk Road and the Digital Silk Road.
The Green Silk Road
At the second Belt and Road Forum for International Cooperation in April 2019, President Xi Jinping outlined a vision of “open, green and clean cooperation”, guided by the UN’s 2030 Agenda for Sustainable Development.
The need for sustainability has been accentuated by the onset of the pandemic.
A focus on sustainable BRI projects dovetails with broader Chinese policy moves in recent months. Last September, for instance, it was announced that the country was aiming to become carbon-neutral by 2060, a goal which will require it to cut emissions by as much as 90%.
While it is currently a world-leading emitter of carbon, China is also at the forefront of clean technology, and has been steadily increasing the contribution of renewables to its energy mix.
In 2020 renewables accounted for 57% of China’s total investment in energy infrastructure, an increase on 2019’s figure of 38%, according to research from the International Institute of Green Finance at Beijing’s Central University of Finance and Economics, as reported by the Financial Times.
This focus on clean energy is also dictating a shift in how the BRI works. Since the pandemic started, renewable power has come to account for a majority of BRI energy investments.
In turn, this corresponds with an increased focus on sustainability among many countries that are key participants in the BRI.
For instance, Egypt has committed to a green economic recovery from Covid-19, using the crisis to spur progress towards the UN’s Sustainable Development Goals.
The Health Silk Road
China is also seeking to expand health-related infrastructure and innovation capacity as part of the BRI.
This speaks to the country’s broader push to position itself as a global health leader, an ambition that has been very much in evidence during the pandemic.
Medical supplies have been distributed around the world by Chinese government agencies and embassies, while ostensibly private institutions such as the Jack Ma Foundation – established by the founder of the e-commerce giant Alibaba – have delivered relief packages to emerging and established nations alike. In March, for example, Nigeria announced it had received 100,000 facemasks, 1000 gowns and 20,000 testing kits from the foundation.
The BRI has also facilitated the distribution of nationally produced vaccines to emerging economies. For instance, the UAE, a major recipient of BRI investment, was the first country outside of China to approve the mass use of its Sinopharm vaccine, while Indonesia – another fundamental link in the BRI chain – recently announced it had approved the Sinovac vaccine, likewise the first country to do so.
In a gesture calculated to garner publicity, China also sent more than 100,000 masks and other equipment to Spain via train along the ‘New Silk Road’ line that stretches from Yiwu, in the country’s east, to Madrid.
The Digital Silk Road
In line with the rapid digitalisation that has resulted from the Covid-19 pandemic, China is placing renewed focus on the BRI as a facilitator of digital and technological innovation.
The Digital Silk Road (DSR) was launched in 2015 under the umbrella of the BRI. In its early stages, it was associated with digital infrastructure and space-industry related projects.
This focus has been expanded considerably and now takes in areas such as cloud-computing, smart cities, surveillance, e-commerce and digital payments.
To take an example, the National Informatization Strategy (2016-2020) called upon the country’s tech giants – among them Alibaba, Tencent and Baidu – to support the DSR and position themselves as global frontrunners in the e-commerce space.
A similar impulse has led Chinese companies to support BRI-participant countries in their fight against coronavirus. For example, Huawei provided two hospitals in Ecuador with auxiliary diagnostic systems, which use artificial intelligence to help doctors diagnose Covid-19.
Within China, meanwhile, tech companies such as Ant Financial and Tencent have partnered with local authorities to set up digital contact tracing and quarantine enforcement systems. Similar systems might be among the tech exports that the DSR will facilitate going forward.
Looking ahead, this increased emphasis on health care and digital systems opens up new opportunities for collaborative innovation with the potential to create high-value jobs and tackle global challenges, although some observers are cautious about the global proliferation of intrusive surveillance technologies that are currently used to monitor Chinese citizens.
Meanwhile, China’s ever-increasing emphasis on clean energy and green solutions will be generally welcomed by many BRI-participating countries, as well as by the global community as a whole.