Belt and Road Initiative

The Chinese government established the Belt and Road Initiative (BRI) in 2013. Through it, China has invested in nearly 70 countries and international organisations, “to enhance regional connectivity and embrace a brighter future”. The lion’s share of the initiative comprises fossil fuel investments, infrastructure, and large scale industries, most of which are considered high-risk. 

The BRI’s investments and lending have raised several concerns. Most investments are shrouded in secrecy, and risk violating procurement and transparency legislation in the countries in which they take place. Extensive lending through the BRI has had a tendency to reduce the manoeuvring room of affected governments.

The BRI also has environmental and climate consequences. A considerable amount of its investments are highly polluting large scale industries, coal-fired power plants and infrastructure projects. Many have been met with global protests, from affected citizens and international decision makers.

In recent years, China has adopted various policy measures in response to such international criticism, including the “Guidance on Promoting a Green Belt and Road” document. This recognises the decision-making challenges faced by Chinese companies and state actors in China’s overseas infrastructure projects, and calls on them to adopt higher environmental and social standards.

Although there has been limited action in the interim, the persistent lack of information disclosure on measures and corresponding implementation, and the economic shock of Covid-19, have stymied these efforts to some extent. 

At the same time, the increasing imperative of the “smart mix” of voluntary and legally-binding measures that govern China’s overseas business activities is generating momentum for concrete domestic policy change.