China’s BRI Turns Ten: Debt or Diplomatic Traps, Why India’s Resistance Matters

India has stayed outside the BRI since the Chinese blueprint with Pakistan, the CPEC, violates sovereignty.

Hiding debt from scrutiny and regulatory compliance may have been tacitly allowed by Beijing and this is an allegation that merits review.

(Image: Aroop Mishra/The Quint)

The tenth anniversary of China’s ambitious BRI (Belt and Road Initiative) which has the personal imprimatur of Chinese President Xi Jinping got off to a relatively modest start in Beijing on Tuesday, 17 October with 23 heads of state/government attending what China had billed as a 'major international event'.

Pitched as the "Third Forum of the BRI" ( earlier ones were held in 2017 and 2019 respectively) the Covid pandemic had led to a delay in convening the forum in the interregnum. In 2019 as many as 37 leaders attended the event and the high-level participation this year has been of a lower number.

Russian President Vladimir Putin, the guest of honor was accorded a visibly warm welcome as a "dear friend” by his Chinese host, even as global attention was focused on Israel’s reprisal against Hamas in Gaza and the rapidly unfolding human tragedy.

Afghanistan was represented by a Taliban delegation led by the acting Commerce and Industry Minister Nooruddin Azizi, and points to Beijing’s comfort level with the regime in Kabul – a development that will be of relevance to Delhi.

Absence of Major Nations at the Forum

The BRI which takes its inspiration from the ancient Silk Route was unveiled as a vast connectivity project that would enhance both land and sea routes enabling China to increase its economic and trade footprint through mega infrastructure projects across Asia, Africa, Europe Latin America, and was unveiled by President Xi soon after he assumed office a decade ago.

However, most major nations including the USA, Japan, and India did not join this initiative and it was not very clear as to how Beijing wished to proceed given that the intervening years saw the world grapple with both the Covid pandemic and the war in Ukraine.

In his keynote address to the Third BRI forum on Wednesday, 18 October, President Xi asserted that the Belt and Road cooperation envisioned in 2013 had progressed from "sketching the outline" to "filling in the details," and that blueprints had been turned into real projects.

Debunking the criticism that the BRI had not achieved very much since its inception, Xi informed the participants that the “Belt and Road cooperation has extended from the Eurasian continent to Africa and Latin America. More than 150 countries and over 30 international organizations have signed Belt and Road cooperation documents.”

Inconsistencies in BRI’s Stakes

Some of the statistics highlighted during the Xi address are significant and point to the potential that the BRI has for the long term. Among the major bullet points is the fact that China has now become the main trading partner of more than 140 countries and territories and this degree of economic and trade dependency on Beijing has its embedded geopolitical element.

It was also claimed by Xi that even as China prioritises the Digital Trade domain by holding an Expo annually, the total trade in goods and services is expected to exceed USD 32 trillion and USD 5 trillion respectively.

It was also added that China would infuse a total of RMB 80 billion ( USD 11 billion) into the Silk Road Fund and that cooperation agreements worth USD 97.2 billion had been concluded at the CEO conference held as part of the forum.

An innovative project is the creation of a BRI program for enhancing small-scale livelihood assistance projects along with vocational education cooperation through Luban workshops. (This should be of interest to India and other developing nations with large populations.)

If these initiatives are taken to their desired levels of fruition, the much-vaunted ‘win-win’ model that President Xi often refers to could be of great value to those BRI nations who are in need of such assistance and investment.

However, the last decade of the BRI funding has been uneven and riddled with inefficient implementation and charges of corruption. Some nations have seen their national debt expanding to unmanageable levels. Sri Lanka, Laos, and Pakistan are cases in point and the cynical quip about the BRI advocacy is that while it is projected by Beijing as a mutually beneficial ‘win-win’ model for both the recipient nation and China – in reality, when the numbers are all toted up – both ‘wins’ are on the Chinese side!

This may be an exaggeration, since in many cases the governing/ruling elite in these recipient nations and their cronies have been guilty of financial impropriety leading to a debt-trap and the Sri Lanka / Rajapakse example is illustrative.

Hiding debt from scrutiny and regulatory compliance may have been tacitly allowed by Beijing and this is an allegation that merits review. India has steadfastly stayed outside the BRI since the Chinese blueprint with Pakistan – the CPEC (China-Pakistan Economic corridor) violates Indian sovereignty in relation to Kashmir and Delhi has also drawn attention to the debt-trap syndrome.

India Questions Chinese Integrity

In a subtle diplomatic move that overlapped with the BRI forum in Beijing, the Indian position was reiterated by NSA Ajit Doval at a security chief meeting in Kazakhstan on 17 October where he noted that it is important to ensure that connectivity initiatives are "consultative, transparent and participatory." He also added that such initiatives ought to respect the “sovereignty and territorial integrity of all countries” and adhere to environmental parameters, ensure financial viability, and not become debt burdens.

Seemingly responding to this aspersion on the integrity with which the BRI is being managed till now, President Xi made an important announcement as part of the eight verticals to be pursued over the next few years.

It was announced that China will release the Achievements and Prospects of Belt and Road Integrity Building and the High-Level Principles of Belt and Road Integrity Building; and establish an Integrity and Compliance Evaluation System for Companies Involved in Belt and Road Cooperation. Furthermore, Xi added, “We will also work with international organizations to carry out research and training on promoting integrity in Belt and Road cooperation.”

A radical thought for Beijing would be to invite such integrity audit expertise from the BRICS group and allow for an objective review and assessment that will advance the realisation of the BRI vision – what President Xi described in his address as creating “new opportunities for global development, and build a new platform for international economic cooperation.”

The disappointing reality is that China’s earnest rhetoric is not matched by similar sincerity when Beijing 'walks the talk’ and this will be the chasm that President Xi will have to bridge before the next BRI forum.

(Commodore C Uday Bhaskar, Director, Society for Policy Studies, has the rare distinction of having headed three think tanks. He was previously Director at the National Maritime Foundation (2009-11) and the Institute for Defence Studies and Analyses (2004-05). He tweets @theUdayB. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)