What to Know About China’s Controversial Belt and Road Initiative That’s Targeting Europe

March 14, 2019, 1:03 PM UTC

China’s Belt and Road initiative, which aims to build new trade routes over land and sea, may soon extend further into Europe. And it’s splitting opinion in the European Union, with some countries seeing opportunity and others seeing only Chinese expansionism.

Here’s a quick guide to what Belt and Road entails, why it’s proving so divisive, and why it might be about to face one of its biggest challenges yet.

What’s Belt and Road?

The initiative is largely about building infrastructure in Asia, Europe and East Africa—roads and railways, ports and airports, pipelines and power plants—but it also takes in other large projects, such as educational programs and the development of industrial and special economic zones. Chinese contractors are heavily involved.

It’s been underway for the last five years or so, initially under the English-language banner of “One Belt and One Road” but since 2016 as the “Belt and Road Initiative” (BRI.) The “belt” part refers to land routes and the “road” part, confusingly, to maritime routes. There are in fact many more than two routes in total, so the word “one” was dropped.

The overall cost is estimated to top $1 trillion within the next decade.

Who benefits and who pays?

In theory, everyone who takes part in this revived Silk Road scheme—a list now more than 70 countries long—benefits from it. Chinese companies plowed more than $15 billion into the initiative last year, according to Beijing’s figures, but the rest is supposedly being fronted by the countries where the investments are being made.

This is where Belt and Road gets really controversial, because many of these countries don’t have the cash. Instead, many are taking Chinese loans that they may not be able to repay. As a result, China has been frequently accused of “debt trap diplomacy” in the way Belt and Road is playing out.

In 2017, China effectively seized Sri Lanka’s Hambantota port. It had provided the loan for building it, and Sri Lanka couldn’t cough up, so a debt-restructuring plan gave China a 99-year lease on the port and Sri Lanka the cash to repay the debt. Kenya’s Mombasa port may suffer a similar fate.

Then there’s the initiative’s role as an influence tool. President Xi Jinping has openly touted it as a pushback against protectionism at a time when the U.S. is becoming increasingly protectionist. Belt and Road was always going to make China more influential, but the advent of the Trump administration means Beijing has a chance to fill a soft-power void that Washington is leaving open.

“The BRI is not a debt trap that some countries may fall into, but an economic pie that benefits the local population,” insisted Chinese Foreign Minister Wang Yi this week. “It is no geopolitical tool, but a great opportunity for shared development.” But others aren’t so sure.

What’s happening in Europe?

Last week, Italian Prime Minister Giuseppe Conte said his country saw an “opportunity” in Belt and Road, and was considering signing up. It would be the first G7 member to do so, though not the first EU country—Eastern European countries such as Hungary and Poland are already on board, as are Greece and Portugal.

Italy’s possible participation has raised alarm bells in Berlin and Washington. Germany’s opposition is reportedly behind-the-scenes, but the American displeasure is out in the open.

“Italy is a major global economy and great investment destination,” tweeted Garrett Marquis, a Trump special assistant. “No need for Italian government to lend legitimacy to China’s infrastructure vanity project.”

What happens next?

China is responding to the disquiet over Belt and Road’s European expansion by promising to cooperate more with American and European companies.

“The Belt and Road Initiative is not a private path of one party, but an avenue of sunshine for everyone to go forward hand in hand,” said Zhou Xiaofei, deputy secretary general of China’s National Development and Reform Commission. “China is not singing solo, but in a chorus of countries along the Belt and Road.”

Zhou was speaking at a seminar where China was showing off examples of Belt and Road projects and, according to a Bloomberg report, stressing how much a “mini-United Nations” of contractors from all over the world were benefiting.

All eyes are now on Rome, where Xi will visit next week, with the hope of signing a framework agreement. Italy’s deputy premier, Matteo Salvini, has indicated that his government will play tough on the terms. “If it’s about helping Italian companies invest abroad, we’re ready to talk to anyone,” he said. “But we’re absolutely not ready to do so if it’s a question of foreign companies colonizing Italy.”

The terms of the agreement, and indeed whether it gets signed at all, should indicate whether the controversial Belt and Road Initiative is about to find its limits.