Belt and Road Initiative: Interim Results and Challenges During Pandemic

482
DOI: 10.20542/0131-2227-2021-65-3-42-51
N. Pyzhikov (ns.pyzhikov@vavt.ru), 
Institute for Development of Integration Processes, Russian Foreign Trade Academy, 7, Vavilova Str., Moscow, 117312, Russian Federation;
Institute for Development of Integration Processes, Russian Foreign Trade Academy, 7, Vavilova Str., Moscow, 117312, Russian Federation; 
Institute for Applied Economic Research, The Russian Presidential Academy of National Economy and Public Administration, Office 1805, Building 9, 82–84, Prosp. Vernadskogo, Moscow, 119571, Russian Federation

Abstract. The article analyses the current status of the Belt and Road Initiative (BRI), its key achievements and challenges, including those related to the COVID 19 pandemic. In the 2010s China has become one of world’s largest investors and BRI is one of the most important tools of Chinese investment policy. Due to its flexible structure, BRI has been able to adjust and develop in the context of the U.S. – China trade war and the growing anti-Chinese sentiment in the world that included the concerns over so called China’s debt diplomacy. But this lack of rigidity is also a challenge to those who study BRI because there is no official list of projects (estimations vary between 118 and 374) and countries participating in BRI (up to 138). China’s key BRI partner is Pakistan. The total value of projects implemented by China in Pakistan as part of the China-Pakistan Economic Corridor was initially estimated at $46 billion but now exceeds $70 billion (new projects were signed even during the pandemic). BRI is increasing the number of its participants. In March 2019 Italy became the first G7 country to sign a BRI MoU with China. While implementing BRI China has faced such challenges as rising concerns of “China’s debt trap”, as well as ecological and political issues. In 2020 BRI is facing a new challenge with the COVID-19 pandemic. Some BRI projects were postponed because of the pandemic, but in some cases they were unaffected. There are 64 out of 138 countries participating in BRI that come from low and lower-middle income groups according to the World Bank classification. Their average ratio of foreign debt to GDP was 54% in 2018–2019. It is most likely that these countries will be hit hard by the coronacrisis. Thus the pandemic will encourage China to tighten the selection process for BRI projects with a focus on the most strategically important and cost effective ones. From the point of view of China’s BRI partners, the effect can be two-fold: the most unstable economies will increase their dependence on China, while with the economically strong countries China will be more willing to make concessions and offer more favorable conditions for cooperation. 

Keywords: Belt and Road Initiative, China, Pandemic, COVID 19, foreign direct investment, debt trap, infrastructure, foreign trade


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For citation:
Pyzhikov N., Gushchin E. Belt and Road Initiative: Interim Results and Challenges During Pandemic. World Eonomy and International Relations, 2021, vol. 65, No 3, pp. 42-51. https://doi.org/10.20542/0131-2227-2021-65-3-42-51



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