China’s Changing Belt and Road Initiative ―Inside the “Shift from Quantity to Quality”―

The Belt and Road Initiative (BRI), announced by President Xi Jinping in 2013 initially sought to expand China’s influence on the Eurasian continent through economic cooperation, while avoiding all-out confrontation with the U.S., which is intent on containing China. Therefore, the Xi Jinping administration launched the BRI to achieve two goals: 1) establish a trade zone that could compete with the TPP and 2) tap overseas demand.

Until as late as early 2015, China’s BRI approach was based on proactive quantitative expansion. However, in the second half of the 2010s, against the backdrop of factors such as China’s economic slowdown, the quantitative expansion approach reached its limit. It became difficult to continue expanding external financing, leading to the announcement of a “shift from quantity to quality”. While still seeking to establish a China-led bloc and supply chain, the current BRI looks to adapt to changes in the internal and external environment while making qualitative improvements, as a means of compensating for the wane in influence resulting from reduced external lending.

An analysis of the eight-point action plan presented at the Third Belt and Road Forum for International Cooperation held in 2023 suggests that the four areas of focus for qualitative improvement are 1) narrowing down the list of priority countries/territories, 2) fostering pro-China sentiment through vocational education and training, 3) expanding in the digital sphere, and 4) supporting the green economy. To assess the extent of the BRI’s “shift from quantity to quality,” it is necessary to analyze progress in each of these four areas.

A comparison of relevant statistical indicators from before and after 2018, when the shift to quality began to be emphasized, reveals a number of trends. External lending has shrunk, in terms of the amounts of both loans made and loans promised. At the same time, there has been a clear reduction in the number of countries targeted. In addition, digital-related cooperation with countries along the Belt and Road and an international cooperation project called “Luban Workshops,” which provides vocational education and training, have become more prominent in recent years.

In view of the above, an overall assessment of progress in the four areas indicates that in two of them, narrowing down the list of priority countries/territories and vocational education and training, progress is generally being made as President Xi Jinping had envisaged. Diplomatic activities appropriate for keeping emerging countries in the BRI, government control over companies and policy banks, and alignment with recipient countries’ needs have supported that progress. On the other hand, progress in expanding in the digital sphere has, except in some areas, been unremarkable. While efforts to support the green economy have only just begun, hardly any progress has been made either. The reasons for this include mismatched perceptions between the Chinese side and emerging countries along the Belt and Road, and the unspoken desire among the emerging countries not to be dragged into the conflict between the U.S. and China.

Looking ahead, the number of countries receiving assistance is expected to continue to be reduced. This is because China wants to avoid being saddled with non-performing loans, is prioritizing domestic policies including addressing inequalities, and is facing a harsh economic environment at home. Moves to expand in the digital sphere and support the green economy are unlikely to progress as the Chinese government had hoped. Moreover, the unpredictable diplomatic environment under the Trump administration will surely make administering the BRI even more difficult.

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