The frequent use of terms like connectivity, corridors, infrastructure, belt and road is a trend started by China
n October 2023, China convened the third Belt and Road Initiative Forum in Beijing. In addition to over two dozen world leaders, hundreds of executives, financial experts and CEOs attended. Since its inception in 2013, extensive discourse has surrounded BRI-related topics. What appears to have lagged behind is an exciting global race among major powers to start more infrastructure projects.
China is different in many ways. A recent article in the East Asia Forum, while commenting on the world economy, remarked that “China and the rest of the world seem to be living in two different universes.” While most of the world has been grappling with the challenge of inflation, “China is cutting interest rates to avoid deflation.” Put simply, the cost of living is increasing globally but decreasing in China.
China’s geopolitical strategies also differ from traditional paradigms that most people are familiar with. Traditionally, great power competition has led to arms races and military alliances, diverting resources from development to war preparations. However, China is dragging its rivals into an infrastructure race.
On the sidelines of the G20 summit held in New Delhi in September 2023, eight signatories from India, the US, Saudi Arabia, the UAE, the EU, France, Germany, and Italy signed a memorandum to build the India-Middle East-Europe Corridor.
The IMEC, primarily pushed by the US in response to the BRI, connects half of the world population and 40 percent of the global economy. It will improve economic development through enhanced rail, road and maritime connectivity. Analysts are calling it a ‘game changer,’ a term earlier used when Canada, France, Germany, Italy, Japan, the UK and the US first launched Build Back a Better World in 2021. At the next session of the G7 in Germany in June 2022, the member countries, led by the US, started the Partnership for Global Infrastructure and Investment. The project aims to mobilise $600 billion to fund infrastructure projects in developing nations by 2027.
Under the PGII, the US and the EU, in collaboration with the African Development Bank and the Africa Finance Corporation, signed an MoU to develop the Lobito Corridor and the Zambia–Lobito railway, which will together form a link across Africa through a number of large mineral deposits. The State Department called the project “the most significant transport infrastructure that the United States has helped develop on the African continent in a generation.”
Although geopolitical rivalries continue, for the first time in great power politics, a significant portion of capital is being allocated for infrastructure and connectivity.
In December 2021, the EU unveiled its $340 billion Global Gateway investment plan, calling it a “true alternative” to the BRI and a trusted brand.
In addition to megaprojects, some countries have started small-scale initiatives as well. For instance, Japan has started the Free and Open Indo-Pacific and Partnership for Quality Infrastructure. The rivalry between China and Japan is especially fierce in Southeast Asia. India, apart from participating in these projects, has started its own regional connectivity initiatives.
Although the geopolitical aspects of these projects are frequently featured in the media, organisations such as McKinsey and the Asian Development Bank consider them partners rather than rivals. The ADB estimates that there is a $26 trillion investment gap globally. Even the combined investment of all these projects will be insufficient to address the infrastructure gap. Therefore, not only are all these investments directed in the right path, but even more are needed to bridge the existing infrastructure gap.
What is even more significant is the fact that regardless of who is financing, these projects will fill the infrastructure gap and will bring opportunities to everyone. Unless something is specifically mentioned, roads, railways, ports, etc, could be utilised by all. Being in close proximity to the areas where investment is focused and being the world’s largest trader, China will surely benefit from the resultant development of these megaprojects as much as any other country.
In recent times, the frequent use of terms like connectivity, corridors, infrastructure, belt and road is a trend started by China. Although geopolitical rivalries continue, for the first time in great power politics, a significant portion of capital is being allocated to infrastructure and connectivity. China has triggered a global race to build infrastructure across the world.
The writers work with The Hong Kong Research Centre for Asian Studies