A study analysing data from hundreds of countries and regions suggests China’s Belt and Road Initiative is linked to better governance and economic development, according to researchers from Nanjing University.
They found the trade and investment scheme – which spans Africa, Asia, Europe and beyond – was also associated with improved corruption control and that it reduced debt risks.
The team – from the university’s Centre for Asia-Pacific Development Studies and led by Mao Weizhun – said their findings challenged characterisations of the trade and infrastructure initiative as a “failure”, “vulnerability trap”, “road of corruption” or a “debt trap”.
They published their research in the peer-reviewed Chinese journal Quarterly Journal of International Politics in late July.
The study involved analysis of data from 197 countries and regions between 2000 and 2023. That included 146 countries that signed belt and road cooperation agreements with China and 135 countries where belt and road infrastructure projects had been launched or completed.
Critics have said the initiative – launched in 2013 – lacks transparency, that the projects fuel unsustainable debt, exploit workers, cause environmental damage and are used by Beijing to wield influence.
Beijing has denied these claims and maintains it is not pursuing “debt trap diplomacy”.
The Nanjing University team’s examination of belt and road cooperation agreements between 2013 and 2023 found that Chinese-backed infrastructure projects contributed to a “development-infrastructure-security” cycle by strengthening economic growth, state capacity and social stability.
“The Belt and Road Initiative, particularly infrastructure construction, has significantly driven a long-term positive cycle in domestic development and national security among countries taking part,” Mao wrote in the paper.
Projects under the sprawling scheme include roads, railways, ports, power networks, communication systems and industrial estates.
Cross-country data analysis was used to assess whether participation and infrastructure development under the belt and road scheme was linked to changes in political stability, governance and economic performance.
The researchers found that belt and road infrastructure projects were associated with better political stability and governance.
They argued that weak infrastructure could contribute to poverty, unemployment and inequality. But better connectivity, more public services and economic opportunities could help reduce these pressures, particularly in developing countries.
The study found nations that received belt and road infrastructure investment showed improvement in corruption control, government effectiveness and quality of governance.
The researchers noted that infrastructure projects were not just about building roads, ports, power plants and communication networks, but also about strengthening the government’s ability to allocate resources and provide public services.
They said infrastructure-related improvements went beyond economic growth by helping governments to maintain order, integrate remote regions and improve institutional effectiveness.
The team also looked at whether Chinese-funded infrastructure projects increased debt risks, using indicators including government debt and fiscal capacity. They found no evidence that taking part in the initiative increased financial vulnerability.
According to the paper, the projects improved logistics, expanded production capacity and led to more revenue, improving debt repayment capacity – and reducing the country’s debt burden.
The analysis used statistical modelling to look at countries across three stages: when they joined the belt and road; when work began on infrastructure projects; and when the projects were completed and put into operation.
It found a debt scale coefficient in the first stage of -1.2 – not a significant level. It did become significant in the second stage, at -10.1, and in the third stage, at -11.2.
“This parallel trend test on debt levels shows the fallacy of the ‘debt trap’ argument,” Mao wrote in the paper.
“The ‘debt trap’ itself lacks empirical support – the limited cases of debt risks were not caused by the Belt and Road Initiative or infrastructure construction, but by long-term structural economic problems accumulated by participating countries.”
Mao did not immediately respond to a request for comment.
The researchers argued that while substantial funds were borrowed for the infrastructure projects, they were also productive assets that could generate economic returns.
They said when the projects were completed they had improved transport, energy, communications and logistics networks, and that could boost production efficiency and industrial activity as well as expand the government’s tax revenues.
“Large-scale infrastructure construction not only brings direct economic benefits to the countries taking part but also optimises their economic structures and strengthens their independent development capacity,” Mao wrote.
“As development capacity improves, participating countries can make better use of domestic resources rather than relying on external borrowing to repay debts.”
The study also found that belt and road infrastructure projects were associated with stronger economic performance through improved connectivity, lower trade costs and more industrial capacity.
To determine this, the researchers assessed indicators including the net output of the industrial sector, GDP growth, productivity, and employment in manufacturing and services.
They said railways, ports and energy networks could attract investment, improve logistics and support manufacturing growth.
They cited the China-Laos Railway, the Jakarta-Bandung High-Speed Railway and the China-Pakistan Economic Corridor as examples of infrastructure projects improving regional connectivity.
Taking part in the belt and road scheme was found to boost economic growth, with infrastructure improvements, employment and consumption playing important roles.
The researchers cited previous estimates showing that participating countries’ combined GDP increased by 39.6 per cent five years after joining the initiative.
Another estimate suggested that about 55.3 per cent of the economic growth linked to belt and road participation could be attributed to infrastructure improvements.
The World Bank has estimated that infrastructure built under the belt and road scheme could generate annual benefits equivalent to 1.3 per cent of global GDP, or about US$1.6 trillion, by 2030, with about 90 per cent of those gains going to participating countries.
The study also looked at the social effects of infrastructure investment, including job creation, poverty reduction and inclusive development.
The researchers argued that improved infrastructure could connect poorer regions with markets, expand economic opportunities and improve access to public services.
They cited estimates that belt and road cooperation had supported investment, created hundreds of thousands of jobs and helped millions of people escape poverty.
The World Bank has predicted that development projects under the belt and road could lift about 7.6 million people out of extreme poverty and 32 million people out of moderate poverty by 2030. -- SOUTH CHINA MORNING POST
