Belt And Road Research Articles

Study on China’s Position on Its Strategic Location, Planning, and Future Outline

This comprehensive analysis highlights the potential of China, the world’s largest energy producer. The research paper provides direction to China in the energy sector. Although currently relying on coal for power generation, in the long term, the country will become the largest exporter of electricity. The transition to sustainable energy production is critical, considering global commitments to reduce greenhouse gas emissions under the Paris Agreement. China’s ability to shift to clean energy is strengthened by its vast labor force, financial strength, and the Chinese government’s commitment to national rejuvenation. By establishing an “Electro-Yuan” system for trading electricity, China could challenge the global dominance of the US dollar. The One Belt, One Road (OBOR) initiative further facilitates a clean electricity trade network with strategic partners worldwide. However, a successful transition hinges on shifting from coal to renewable energy sources, enhancing existing grid infrastructure for cross-border transmission, and effectively implementing the Electro-Yuan system.

Environmental Regulation, Institutional Distance and China’s Outward Foreign Direct Investment in the Belt and Road Countries

Purpose - This study aims to explore the direct impact of environmental regulation on outward foreign direct investment (OFDI), and the moderating role of institutional distance in the relationship between the two, focusing on China’s OFDI in 58 countries along the Belt and Road (BRCs) during the period 2003-2021.
 Design/Methodology/Approach - The fixed effects model, DID model and panel threshold model are adopted in the basic estimation and heterogeneity tests.
 Findings - The results show that environmental regulation has a significant positive impact on China’s OFDI into the BRCs, and institutional distance has strengthened this positive impact. But this moderating effect can only be detected when the institutional distance is positive. Comparative analysis before and after the Belt and Road Initiative (BRI) showed that the impact of environmental regulation on China’s OFDI was greater after BRI than before BRI. Furthermore, the significant impact of environmental regulation on OFDI could only be observed in countries with relatively stringent environmental regulation. Threshold tests found that there is a threshold value in the impact of environmental regulation on OFDI. The DID estimation results showed that when the institutional level and environmental regulation level of the host country are lower than that of China, the BRI plays a greater role in promoting China’s OFDI into the BRCs.
 Research Implications - The findings have significant implications for understanding how China’s OFDI responds to the environmental regulation of the host countries, simultaneously considering the impact of institutional distance.

Transformative Potential: A Comprehensive Analysis of China-Pakistan Agricultural Cooperation under CPEC

Given the persistent concern of global food security, particularly in developing nations where agricultural sectors faces various challenges, the increasing collaboration between China and Pakistan under China-Pakistan Economic Corridor (CPEC) presents an interesting case study for agricultural cooperation. This research explores the partnership, examining its evolution, potential, and inherent challenges. The analysis maps out the growth of bilateral trade between China and Pakistan from 2011 to 2019, analyzing policy frameworks, and explores the diverse fields of cooperation, including infrastructure, product processing, machinery, and information exchange. While highlighting promising prospects, it identifies challenges such as low enterprise competitiveness, limited information exchange, and political risks, all considered in the context of CPEC and the Belt and Road Initiative (BRI). It emphasizes the transformative potential of China-Pakistan agricultural cooperation under CPEC, underscoring the importance of comprehensive planning and strategic approaches to maximize mutual benefits in the domain of international agricultural collaboration.

Externalisation of Domestic Economic Constraints: China’s Spatial Fix in Kazakhstan and Turkmenistan

Growing capital over-accumulation and excessive industrial production have forced policymakers in Beijing to search for profitable outlets overseas. The Belt and Road Initiative (BRI), which focuses on infrastructure connectivity projects across Eurasia, reflects these efforts. This paper theorises BRI as a spatial fix aimed at overcoming the recurring problem of over-accumulation of capital. This paper focuses on BRI-led projects in Kazakhstan and Turkmenistan. By conducting unstructured interviews with experts and examining projects, this paper found that BRI-led projects in Kazakhstan and Turkmenistan not only provided a new geographical space and under-saturated market for Chinese surpluses but also created the demand for Chinese State-Owned Enterprises (SOEs) which were facing a decline in returns. This paper also found that through elements such as non-competitive bidding, embedded conditionality, and double preferential loans, China has successfully stimulated overseas demand for its surpluses. The study, therefore, concludes that BRI-led projects in Kazakhstan and Turkmenistan serve as a spatial fix for China.

Dynamics of Regional Integration in Central Asia: A Case Study of Belt and Road Initiative

In today’s globalized world, it has become a necessary norm to be part of a regional integration process for neighbouring countries in any region of the world. Central Asia is a good example to understand with its rich past and unexplored perspective. This phenomenon can be better understood by examining the quest of Central Asian republics (CARs) for regional integration and the role of BRI in this process. ‎For that, this paper explores the historical dynamics and drivers of regional integration in Central Asia with a special focus on the role of the Belt and Road Initiative (BRI) which aims to improve regional infrastructure, commerce, and investment, has the potential to redefine the direction of regional integration in Central Asia in the face of shifting global power dynamics. Furthermore, Liberal Intergovernmental theory helps explain the Central Asian Republics’ core actions and the impact of their domestic policies providing a details view of what drives regional integration in Central Asia. The study explores the historical dynamics and drivers of regional integration in Central Asia, focusing on the role of the BRI in reshaping these dynamics at domestic and external levels, using qualitative and thematic analysis of secondary sources.

The link between Chinese belt and road initiative and foreign direct investment inflows in Southern Africa

This study investigates the association between infrastructure development in China's Belt and Road Initiative (BRI) and foreign direct investment (FDI) inflows to southern Africa, using a propensity score matching–difference-in-difference (PSM-DID) regression. The empirical examination is based on a sample of eight southern African countries selected based on data availability. We find that China's BRI has significantly positive effects on FDI inflows to southern Africa. Therefore, governments and development policy makers in southern African countries are recommended to devise supporting policies in order to ensure that the BRI leads to sustainable FDI inflows and sustainable economic growth. The study makes significant contributions to theory, policy, and practice. In policy and practice, our study is valuable for policy-making on driving FDI inflows. However, the context of the study is specifically southern Africa, hence, the results might not be generalizable to other African regions or Africa as a whole, so further research is needed to consider those areas.

Transnational Law and Criminal Justice System: Highlighting Legislative and Procedural Challenges to combat Cyber Crime in the wake of CPEC

World Justice Project’s (WJP) Rule of Law Index 2022 ranked Pakistan globally at 129th out of 140 countries while on regional level Pakistan is ranked 5th out of 6 countries. Where Pakistan’s justice system is hitting the bottom in rule-of-law index, at the same time, the entire nation is celebrating China-Pakistan Economic Corridor (CPEC), which is a flagship project of Belt and Road Initiative (BRI) also known as OBOR. This is a Chinese master stroke in the cross-continental geo-economics of the world. With a heavy influx of Chinese businesses and Chinese nationals arriving in the country, the markets and Pakistani citizens are vulnerable to criminal activities including more sophisticated types of crimes such as crimes involving ICT. In particular, incidents of ATM skimming are rising in Karachi among other crimes. Foreign nationals are arrested include Chinese nationals; however, legislative and procedural lacunasand prosecution related defects eventually cause the prosecution version to collapse during trial. Therefore, this research study proposes strong legislative and judicial framework, human resource development including need for prompt initiatives in the subordinate judiciary. This research also highlights the need for having proper compliance of environmental and labor laws regulations. The research is based on mixed methodology. Quantitative analysis is conducted on the data collected through questionnaires from the sample of 50 respondents that include advocates, FIA investigation officers and public prosecutors.In addition, qualitative analysis is done through interviews of senior officers from NR3C as well as I.Os, students, academics and research economists from academia.

China's One Belt One Road (OBOR) Initiative and Its Ambitions for Global Hegemony

This research paper analyses China's One Belt, One Road initiative and explores its ambitions for influencing the world economy through these economic corridors. However, each economic corridor has been separately explained in order to understand how these economic corridors would contribute to the rise and expansion of China in the world. In addition, to know whether the One Belt and One Road Initiative offers these six corridors' member states an opportunity to create a win-win relationship with China. It will ensure access and increase trade volume to the major world markets, or is it still a pipe dream for these countries to obtain such goals and objectives? Apart from this, to find out how it would improve and enhance regional connectivity, people-to-people contact, economic development, transit trade, road and maritime transport networks and tourism. This study used the qualitative method with an interpretive and descriptive approach. The purposive sampling technique was used to select the participants for the interview, and the snowball sampling technique was used to approach the participants. Five participants were interviewed through an interview schedule. The interview schedule was emailed to participants, and they typed their responses on MS Word and sent them back to the researcher. The researcher developed themes, and data were analyzed according to those themes. The findings of the study suggested that China has initiated these projects to promote its political power and economic interests in the region.

CORRIDOR POLITICS IMEC VS. BRI: ANOTHER GEOPOLITICAL FACE-OFF IN U.S.-CHINA RIVALRY

In a rapidly changing global landscape shaped by the COVID-19 pandemic, the Ukrainian conflict, and the Palestinian crisis, heightened geopolitical tensions are pushing nations toward strategic alliances and economic collaborations. One such initiative, the "India – Middle East – Europe Corridor" (IMEC), has emerged as a potential alternative to China's Belt and Road Initiative (BRI), which plays a central role in China's global influence. The intensifying rivalry between the United States and China is a defining feature of contemporary geopolitics. IMEC's potential implementation could compel Middle Eastern nations to make strategic choices, particularly within specific industries, possibly hindering socioeconomic progress in the region. This research paper takes a neorealist perspective to analyze the U.S.-China rivalry and conducts a comparative analysis of BRI and IMEC and exploring whether the IMEC poses a challenge to the BRI within the global geopolitical and geo -economic context. Ultimately, the paper concludes that IMEC, especially against the backdrop of the 2023 Palestinian crisis, does not present a substantial threat to the BRI.

China’s Foreign Security Strategy Through the Belt and Road Initiative Under Xi Jinping: Achievements and Challenges

After becoming General Secretary of the Communist Party of China in 2012, President Xi Jinping led the implementation of a comprehensive reform of the national security strategy. Among that, the foreign security strategy plays an extremely important role in China’s national security strategy under the leadership of President Xi Jinping to realize the goal of the “Chinese Dream”, rejuvenating the great Chinese nation. To achieve that goal, the Belt and Road Initiative (BRI) is the key strategy to help China rise to become a global superpower replacing the position of the US in the future. This paper uses a qualitative analysis method through secondary data collected in October 2023. The research results will provide an overview of the BRI. From there, the paper objectively and multidimensionally assesses the results achieved by the BRI so far, while reflecting the challenges currently and prospectively facing the BRI.

Greening the belt and road: How GVCs revolutionize carbon intensity in participating countries?

As a critical link between production and carbon transfers, Global value chains (GVCs) increasingly support the green industrial transformation in the Belt and Road Initiative (BRI) countries. Based on the theoretical analyses, this study estimates the impact of GVCs participation on carbon intensity using the panel data in 22 BRI countries of 40 industries during 2000–2019, it also distinguishes the effects of national-industrial-ownership heterogeneity and clarifies the influence paths. The main findings are: (1) The average carbon intensity level presents a downward trend, and the GVCs position improved gradually recently after a long term decline before 2014 in fluctuation. Both behave differently when distinguishing participants at the country-industry-ownership dimensions. (2) GVCs position has a robust and negative correlation with carbon intensity. (3) At the national scale, developing countries and Annex I countries in the Kyoto Protocol benefit more from GVCs position upgrading in carbon reduction. At the industrial level, increase in GVCs position has significant carbon mitigation effects on agriculture and manufacture (labor and capital intensive) industries, while not significant in service (technology intensive) industries. Considering firm ownership, domestic firms could realize more carbon reduction through GVCs position revolution, while it's not significant for multinational enterprises. (4) From mechanism analyses, the suppression of carbon intensity by GVC upgrading is mainly exerted through its impact on improving capital and labor efficiencies. Policy implications on carbon intensity reduction are finally suggested.

The Renminbis Ascent: Challenges, Opportunities, and Implications for the Global Monetary System

The Renminbis (RMB) journey towards international prominence encapsulates China's economic metamorphosis and the evolving dynamics of the global monetary system. This paper delves into the multifaceted trajectory of the RMB, highlighting the challenges and opportunities it faces in its quest for global acceptance. It provides an in-depth analysis of the implications of the US-China trade war and the global pandemic on the RMBs internationalization. The paper also underscores the transformative potential of strategic initiatives such as China's Belt and Road Initiative (BRI) and the pioneering Digital Yuan. Through a nuanced exploration of these themes, this study offers insights into the RMB's current status and its prospective role in the global monetary order. As countries grapple with changing trade dependencies and the digital revolution in finance, the RMB emerges not just as a participant but as a potential leader in reshaping the contours of international finance.

Innovation and OFDI along the Belt and Road

Outward foreign direct investment (OFDI) has become an important strategy for enhancing firms' innovation capabilities through the reverse technology spillover effects from overseas innovation experience. The extant research on the effect of OFDI on innovation has focused primarily on developed economies, while the influence of OFDI in developing countries has remained relatively unexplored. The major Belt and Road Initiative (BRI) encourages Chinese firms to invest in Belt and Road (BR) countries—mainly developing nations. We investigate the impact of BR OFDI on Chinese firms' innovations and its influencing mechanisms. The main findings are as follows. First, BR OFDI has a positive effect on innovation by increasing R&D spending and returns on investments in overseas subsidiaries. Second, the number of research-driven subsidiaries has a positive moderating effect on innovation. Finally, the BR ODFI innovative effect is stronger after the launch of the BR initiative in 2013 and more significant for nonstate-owned enterprises. Our research has theoretical significance by uncovering the overseas return mechanism and the moderating effects of investment depth and motivation on the impact of BR OFDI on innovation—topics rarely explored in the OFDI literature. These research findings have practical implications for governments designing effective policies to promote BR OFDI activities and for firms developing robust OFDI investment strategies along the Belt and Road to improve their innovation performance.

The interplay of China and Gulf countries in third-party market dynamics: an asymmetric competition perspective on the Belt and Road Initiative

China’s recent shift in the Belt and Road Initiatives (BRI) focusses on engaging middle powers in the Global South for joint development of commercially viable projects in third countries. Among these are the oil-rich Gulf heavyweights seen as critical partners and supporters of the BRI. Yet, instances of competition or conflict of interests with Beijing are not uncommon. Applying the asymmetric competition theory, this study compares Sino-Emirati interactions in maritime infrastructure in the Horn of Africa with Sino-Saudi cooperation in China-Pakistan Economic Corridor. We find that Gulf heavyweights can leverage their asymmetric advantages to affect the interaction patterns with greater powers. By distributing resources disproportionally, the medium Southern powers can strive to partially establish structural power, enabling them to get dis-embedded from the single cooperation framework dominated by a great power. In the case of seemingly harmonious third-party collaboration, a dynamic analytical perspective reveals that early embedding these actors might lay the groundwork for the creation of asymmetric advantages which can be leveraged later.

Logistics performance system and their impact on economic corridors: a developing economy perspective

PurposeThis study aims to investigate the various systems in logistics industry of Pakistan through the lens of the World Bank's logistics performance indicators (LPI) and understand their impact on the China–Pakistan economic corridor (CPEC) that is a vital part of China's belt and road initiative (BRI).Design/methodology/approachIn this study thematic analysis was performed on twenty-three semi-structured interviews with experts in Pakistan's logistics and supply chain sector to gain an in-depth insight into the logistics performance relative to CPEC.FindingsA performance gap exists in the logistics systems in Pakistan, both for hard and soft infrastructure. The significant challenges are the inefficiencies of the government, minimal use of information and computing technology (ICT), and an incapable workforce. It is essential to be cognizant of the ground realities and amendments required in the existing policies and practices in light of the challenges faced and best practices adopted by developed and developing countries with good standing in logistics performance. This study will guide policymakers and practitioners for hard and soft logistics infrastructure improvement, which may benefit economic corridors in general and CPEC in particular.Originality/valueThis study contributes to the existing literature by highlighting the role of ICT in improving both soft and hard logistics infrastructure, which can lead to significant development of economic corridors. The study makes use of a case study of the CPEC to demonstrate the lack of ICT can hamper the growth of an economic corridor despite billions of dollars of investment in the hard infrastructure development projects.

Why the West’s alternative to China’s international infrastructure financing is failing

As geopolitical rivalry intensifies, Western states have moved to compete with China’s Belt and Road Initiative (BRI). However, the mobilisation of funds for global infrastructure remains paltry, suggesting that Western states cannot contest Chinese dominance here. Why? Through comparative political economy analysis of China and the United States, we argue that serious competition cannot be willed into being by state managers thinking geostrategically. States’ strengths and weaknesses are rooted in structural political economy dynamics. Where state managers’ plans jibe with, or express, the interests of powerful social forces and the capital and productive forces they command, a powerful impact results. This is true of China, whose BRI is principally a spatio-temporal fix for industrial overcapacity and over-accumulated capital. Conversely, where geopolitical ambitions are divorced from powerful groups’ interests and material realities, results are lacklustre. This applies to the United States, characterised by infrastructural decay, industrial hollowing-out and a dominant financial sector largely disinterested in infrastructure. Although US state managers are turning towards increased state spending on domestic infrastructure, internationally, the West’s continued neoliberal approach still relies on the already-failed approach of mobilising private capital into infrastructure investment.

China’s Foreign Policy toward the Central Asian Republics through the BRI

Central Asia, located in Eurasia’s hinterland, is one of China’s primary foreign policy destinations. The Belt and Road Initiative (BRI) has emerged as the most important means of furthering relations between China and the five Central Asian republics. A new phase in China’s foreign policy towards Central Asia was marked by the launch of the BRI, which sparked a new round of cooperation between China and the Central Asian republics. Since the implementation of the BRI in 2013 China’s foreign policy has prioritized Central Asia as part of the initiative. China’s economic interests and influence in the Central Asian republics have increased as a result of the initiative’s implementation. In the era of the multipolar world order in which China as one of the major powers is playing a central role, Beijing’s international policy includes its bilateral and multilateral relations with the Central Asian states. This paper aims to discuss how the Chinese BRI has reconfigured China’s exchange relations and influences on Central Asian countries, as well as how the BRI has worked in each country in the region.

The emergence of geo-economic institutions: observations on European and Chinese development cooperation in Ukraine, Georgia, and Moldova 2014 – 2020

The emergence of China as a major provider of development finance has garnered considerable scholarly debate. Chinese investments and their impact on recipient states have been extensively studied, mainly focusing on the Belt and Road Initiative (BRI). In response to the BRI, the European Commission recently announced its connectivity strategy, the Global Gateway initiative. In this context, and even before the announcement, little work has been done to map Chinese state capitalist development finance side by side with the European Union’s (EU) market-led, public-private partnership-oriented strategies, especially within Europe’s own neighborhood. Additionally, the literature insufficiently explains why development institutions (agents) would act geo-economically to enforce their most powerful member states’ (principals) international agendas. This lack of theoretical explanatory power poses a serious puzzle. Thus, we ask, how has EU and Chinese institutional investment cooperation developed (legally and financially) in the EU’s Eastern Partnership (EaP) region in the previous EU Multiannual Financial Framework (MFF) from 2014 to 2020? We argue that development institutions have acted in accordance with their principal’s policy goals by facilitating investment and institutional agreements and by offering beneficial cooperation conditions, so that the EU and China can direct investment in a geo-economic manner if they choose to do so. In the following, we find that European investment in the EaP countries Ukraine, Moldova, and Georgia, has been huge in absolute terms (amount invested) and strong in relative terms––through deeper economic cooperation––when compared to Chinese investment activity in the same countries. This development supports the EU’s aim of countering China’s increasing economic presence in the region. However, we find that this gap has been closing in total terms. Our study suggests that while China has not matched EU investment in the EaP region for the previous MFF, further research is needed to unpack individual sectors and their geo-economic implications for official development institutions and their respective states.

The impact of the evolution of the iron raw material trade pattern on the national economy: The B&R perspective

Iron plays a pivotal part in the economic development of the countries along the Belt and Road (B&R countries), most of which are developing countries. With the continuous deepening of the Belt and Road Initiative (BRI), the iron trade pattern has changed, which has had diverse impacts on economic development. Therefore, from the perspective of the iron industry chain, we investigate the impact of the evolution of the iron raw material (IRM) trade pattern on the national economic development of the B&R countries based on the complex network and penal regression method. The major completions are as follows: (1) The import of IRM has a significant promoting effect on the national economy; (2) After the BRI proposal, the structure of iron products exported by B&R countries has been upgraded, and the dependence of the economy on IRM export has decreased, which is conducive to economic development; (3) The trade of IRM among B&R countries has become more diversified, resulting in a lack of significant correlation between betweenness centrality and the national economy.

Impact of the Belt and Road Initiative: The case of Pakistan

This study investigates the macroeconomic impact of the Belt and Road Initiative (BRI) on Pakistan using the synthetic control method. Based on the panel data of 42 non-BRI countries, we construct a synthetic Pakistan to estimate the economic growth trend of the country without the BRI. By comparing the actual economy with the synthetic case, our results show that the BRI increases the annual per capita GDP growth rate of Pakistan from 3.04% to 4.69% for the period 2013–2018. Pakistan’s per capita GDP in 2018 would have been Int$5,022 instead of Int$5,567 if the BRI had not existed. The outcomes of the in-time placebo test, in-place placebo test, and dropping sample test all confirm the robust impact of the BRI on Pakistan.