Transformation of the Belt and Road Initiative Under the New Guidelines for China’s Internal Development

What the paper says

The Belt and Road Initiative is one of the most consequential international projects of the People’s Republic of China; it is intended to ensure its economic development and align with its foreign policy interests. Over the last seven or eight years, the Chinese leadership has adjusted the country’s socio-economic development guidelines in response to new internal and external challenges, and these modified guidelines have changed the environment in which the Belt and Road is being implemented. The article analyzes official party and government materials together with publications by Chinese researchers in order to assess how the implementation of the Belt and Road has changed as the Chinese economy makes the transition from rapid to “high-quality” growth, is exposed to increased internal and external risks, and follows its “dual circulation” strategy and “new quality productive forces” model. What follows from examining those sources is that this new developmental stage will emphasize applying transparent standards for China’s trade and economic cooperation with other countries and for improving coordination between Chinese enterprises taking part in the initiative. The article notes the development of a more cautious approach to investing in large-scale infrastructure projects and the urging by the People’s Republic of China leadership that Chinese companies keep track of the costs of their economic activity abroad. The importance of the Belt and Road for implementation of the dual circulation strategy becomes clear in light of China’s lagging transition to an economic model based on domestic consumption. The Belt and Road’s role in forming chains of production and technology that are linked to China as well as in testing and building upon advancements in Chinese science is also discussed. China’s economic partners may in the medium term face a more cautious approach from Chinese enterprises toward expanding cooperation within the Belt and Road Initiative, a factor which Russia should also take into account when building trade and economic cooperation with the People’s Republic of China.