Unraveling the BRI: China’s Motives and Impacts on Development

• In Event: Domestic Sources and International Implications of a Globalizing China

Abstract

With the expansion of China’s Belt and Road Initiative (BRI) a popular narrative has emerged in the Western press: China is engaging in “debt-trap diplomacy,” as BRI projects result in large debt obligations to Chinese banks, leaving borrowers beholden to the Chinese government, which can then demand economic assets or policy concessions. Academic literature has been critical of the debt-trap narrative, yet offers limited insight as to what is actually driving this seemingly predatory lending, or how this may impact host country economic development. In this paper we explore China’s motives and the impact of BRI projects on host country development by investigating the process of BRI infrastructure development from project identification to post-construction maintenance. We argue that BRI is best understood as a large-scale effort to create guaranteed business activities for Chinese companies outside of China – a form of self-funded business export. Host countries are left with high debt obligations and may be saddled with quasi-commercial white elephant assets that do little for long-term economic development. Our analysis focuses on three cases: The Hambantota Port in Sri Lanka, the Coca Coda Sinclair dam and hydroelectric power plant in Ecuador, and the Nairobi to Naivasha rail line in Kenya. We also offer preliminary insights from a larger dataset on BRI processes that we are currently developing.

Authors

• Jonas Gamso, Arizona State University

• Michael Moffett, Thunderbird School of Global Management