According to a joint report by the Griffith Asia Institute and Fudan University, China’s investments in Belt and Road Initiative (BRI) countries surged to their highest level since 2018, with approximately $50 billion allocated to overseas projects last year. This substantial increase in investment represents a remarkable 80% surge compared to the previous year, pushing the total investment by the 150 participating countries in the infrastructure initiative to over $1 trillion since its inception in 2013.
The report, authored by Professor Christoph Nedopil Wang, Director of the Griffith Asia Institute, offers crucial insights into the nature and trends of Chinese investments in BRI countries.
“There has been a significant uptick in investments in high-tech projects, particularly in the electric vehicle production sector.”
The battery sector alone attracted approximately $8 billion in investments, driven by ambitious plans for battery factories in South Korea and automobile manufacturing facilities in countries such as Thailand, Vietnam, Brazil, and Hungary.
Despite apprehensions regarding China’s lending practices and influence in borrower countries, the report affirms the continued expansion of overseas investments. This growth is particularly noteworthy amid the domestic economic slowdown in China.
Notably, the report observes a shift in the scale and nature of BRI projects; the average size of announced construction projects last year dipped below $400 million. This trend reflects China’s strategic pivot towards prioritizing “small and beautiful” projects as opposed to the large-scale infrastructure endeavors that characterized the initiative’s early years.
While the report primarily focuses on China’s engagement through equity stakes in overseas projects, it acknowledges the intricacy of tracking Chinese financing. Consequently, the report offers a comprehensive overview of China’s involvement in the BRI rather than a precise measurement of total financing.
“In the foreseeable future, China’s participation in the BRI is anticipated to further expand, with a pronounced emphasis on renewable energy, mining, and related technologies.”
These projections align with China’s broader economic objectives and its pursuit of partnerships in critical sectors essential for sustainable development and technological advancement.
In essence, the report illuminates the evolving dynamics of China’s investments in BRI countries and underscores both the opportunities and challenges for participating nations. As China extends its global economic footprint, understanding its engagement in the BRI is imperative for policymakers, investors, and stakeholders alike.
Click here to access the full report.