China’s Belt and Road: Implications for the United States

Despite potential gains for the United States, BRI poses significant risks to U.S. economic interests.
 

BRI’s size and scope give it the potential to boost global gross domestic product (GDP) by as much as $7.1 trillion by 2040 and reduce global trade costs by up to 2.2 percent.30 It promises to provide much-needed financing to developing countries, helping build the infrastructure necessary to erase blackouts, ease transportation bottlenecks, and make many economies more globally competitive. The United States, even if not formally part of BRI, would likely benefit in some ways if BRI builds infrastructure that accelerates global economic growth.

Were U.S. companies able to sell equipment and material required in the production, maintenance, or operation of the infrastructure built in BRI countries, those U.S. firms would stand to profit. To the extent that modern infrastructure lowers transportation and communications costs in BRI countries, U.S. producers trading with and operating out of those countries would also benefit. Global political stability usually accompanies sustained economic growth, and the United States would benefit from greater stability throughout the developing world.

The actual implementation of BRI, however, makes it likely that the costs will considerably outweigh the benefits for the United States. BRI has added to some participating countries’ debt levels to an unsustainable extent. BRI projects are tied to Chinese contractors and conducted through a largely closed bidding process, excluding firms from the United States and many other countries. Because Chinese workers do most of the construction and then operate the newly built facilities, the transfer of know-how and training of local workers is limited.31

China’s push to set technical standards through BRI and its banks’ ability to provide subsidies to firms building BRI projects will likely tilt the playing field in some countries away from non-Chinese multinational corporations, as well as local firms. In many BRI countries, the United States will struggle to keep pace with China as Chinese firms rapidly gain market share and Chinese technical standards become the norm.

When these emerging debt crises in BRI countries materialize, they will undermine global economic growth and macroeconomic stability at a time when the COVID-19 pandemic has already led to the sharpest global economic contraction since the Great Depression. Debt crises also have the potential to increase the risk of a financial crisis.32 Countries that go through a debt crisis will likely endure a long-lasting economic contraction, which would lower demand for U.S. exports.33 A debt crisis that occurs amid a pandemic would be even more catastrophic, as the country would likely be forced to cut back on social services in order to meet debt obligations, which could hamper efforts to contain COVID-19 and deal with its aftermath. Finally, debt distress that results in countries leasing back major projects or collateralizing a high percentage of their loans means more countries could become economically dependent on China, which China could leverage to extract political concessions in ways that undermine U.S. interests.

BRI creates unfair advantages for Chinese companies, leaving U.S. and other foreign companies unable to compete in a number of BRI countries.
 

Although Beijing consistently emphasizes that BRI projects are open to all bidders and that it would welcome partnerships with foreign companies on projects, Chinese companies still win the vast majority of BRI contracts. An examination of the contractors participating in Chinese-funded projects shows that 89 percent are Chinese companies, 7.6 percent are local companies (companies headquartered in the same country where the project was taking place), and 3.4 percent are foreign companies. Projects funded by MDBs, however, favor local contractors (40.8 percent), with a rough split between Chinese (29 percent) and other foreign companies (30.2 percent).34 China has used BRI to help propel its construction contractors into global leaders, holding the top five and seven out of the top ten spots in the ranking of global contractors in the world. No U.S. firms are even in the top twenty today.35

China has successfully used its development model to create industrial champions. The process often starts with a state-supported Chinese company importing technology (either legally or through coercion or sometimes theft) from foreign firms. These Chinese firms then adapt that technology while significantly increasing their output, production processes, and experience, selling into a domestic Chinese market often protected in some ways by tariffs or other regulatory barriers from import competition. The large Chinese domestic market allows these firms to grow into huge companies, often building sophisticated and well-honed production processes, which they then use in export markets, including in BRI countries. Aided by state-backed financing on favorable terms to the companies, these firms are then well positioned to win construction contracts and many other deals in export markets, particularly in developing countries. A significant portion of the Chinese goods sold represent excess production that is looking for a home, so Chinese companies often sell at prices far below what market-based companies can offer.

China’s push to export high-speed and standard-gauge rail along BRI provides an example of this development model in action. After energy, BRI’s most ambitious, expensive, and closest-to-completion undertaking is to build railroad lines transporting goods and people from China across Central Asia to Russia and Europe, along with additional lines running from southwestern China throughout Southeast Asia and railroads in Africa and Latin America. To develop its railroad system from one in which trains moved at an average speed of nineteen miles per hour in 1993 to one in which, just fifteen years later, sleek trains moved at nearly 220 miles per hour, China began by leveraging its vast domestic market to import foreign technology and adapting the technology at home.36 Beijing has built more miles of high-speed rail domestically than the rest of the world combined.

As China became saturated with high-speed rail lines, it sought to export its excess capacity and identified BRI as the perfect conduit. As with other sectors, railroad construction allows Beijing to export excess capacity, particularly steel, and to secure more reliable sources for needed inputs. China is providing subsidies to BRI countries to facilitate the purchase of Chinese rail, which is displacing rail built by multinationals from other countries, in particular Canada, France, Germany, Japan, and South Korea.37 Although it is unclear whether the economics justify the cost of constructing these rail lines through Central Asia, Southeast Asia, and other regions, they will help reorient economies toward China.

China is growing its financial technology companies, which use BRI to gain privileged access to millions of consumers while potentially giving Beijing major surveillance opportunities.
 

The World Bank estimated in 2017 that nearly two billion adults lack access to a bank account or mobile money provider.38 Such unbanked individuals rely on cash, which can be unsafe and hard to manage, and find it difficult to navigate financial emergencies without access to more sophisticated financial services.

Chinese financial technology companies—defined as those employing technology-enabled innovation in financial services—have been quick to address this unmet need in a number of BRI countries, particularly in Southeast Asia and Africa. Although Chinese private companies are driving outward expansion of Chinese fintech, they often use the BRI or Digital Silk Road label to gain domestic political support for their overseas commercial expansion and leverage the market access provided by BRI projects.39

China’s fintech companies have grown significantly in recent years.40 China’s largest fintech company, Ant Group, has rapidly expanded its reach overseas, investing in banks, insurance companies, and payment systems providers.41 Ant’s mobile payment app, Alipay, is estimated to have more than 1.3 billion users, 900 million in China and the rest concentrated in BRI countries, which represents nearly four times as many users as the largest U.S. mobile payments company, PayPal.42 Close on Ant’s heels is Tencent, which has been pushing its WeChat Pay into a number of BRI markets, particularly Indonesia, Malaysia, Russia, and Thailand.43

Because fintech companies depend on vast amounts of data and AI to optimize their offerings, China is well positioned to dominate this sector. Alipay and WeChat Pay, for example, generate a significant amount of data on spending, cash flows, and credit evaluations through their control of more than 90 percent of the huge mobile payments market in China.44 Because China already has the largest e-commerce market in the world, data generated from its digital marketplace provides a strong backbone for fintech expansion into other countries; encouragement and subsidies from the government, particularly for the development of data storage infrastructure, have facilitated fast growth for Chinese fintech companies (although the recent shelving of Ant Group’s initial public offering signals that the Chinese government will likely seek to rein in some activities of Chinese fintech firms).45 These fintech firms can use a vast amount of data to provide smarter and more customized services to both individuals and small- and medium-sized enterprises (SMEs) in foreign countries, including those along BRI.46

Beijing is also focusing on blockchain ledgering. Chinese leaders believe that blockchain technology will be the foundational infrastructure for future technological innovation, and in 2020 Beijing launched the Blockchain Service Network (BSN).47 BSN is designed to leverage blockchain technology to offer software developers a cheaper alternative to current server storage space offerings.48 A number of major blockchain projects have joined BSN, integrating their own chains with it, thereby enabling developers to create applications on the larger, less expensive BSN.49 Such integration also allows Beijing to bring this “international plumbing,” including the network infrastructure in Australia, Brazil, France, Japan, South Africa, and the United States, under its influence.50 As China’s BSN white paper noted, “Once the BSN is deployed globally, it will become the only global infrastructure network autonomously innovated by Chinese entities and for which network access is Chinese-controlled.”51

Many BRI countries welcome Chinese fintech companies, which could bring more people and small businesses into modern banking and offer affordable lending, insurance, and payment services. Some countries, however, have resisted China’s fintech platforms because they cut out countries’ central and local banks, can make it harder to account for financial flows, and risk hardwiring their banking system to the Chinese economy.52 Both Indonesia and Nepal, for example, have barred individuals and businesses from processing Alipay and WeChat Pay payments for these reasons.53 Some analysts have expressed concern that Chinese firms’ dominance over BSN, which could provide Beijing influence over blockchain networks outside China, presents security risks comparable to those raised regarding Chinese firms’ control over 5G networks.54 If illicit actors were to use applications built on BSN, the United States’ ability to take cryptocurrency-related enforcement actions or to prosecute those violating U.S. law related to certain cybercrimes could depend on cooperation from China for the digital data evidence needed to make a law enforcement case. Similar concerns arise over China’s fast-moving plans for a digital renminbi, called the Digital Currency/Electronic Payment (DCEP), to replace its physical currency. DCEP’s design gives China’s central bank real-time financial surveillance of all users’ transactions, potentially bolstering the government’s control over private behavior and adding to the reach of its “digital authoritarianism.”55

The COVID-19 pandemic is accelerating the trend of slowed lending and increasing debt distress.
 

Prior to the pandemic, China’s BRI lending had already shown signs of slowing, a result of slackening demand, efforts by Beijing to raise lending standards, and attempts by Chinese banks to deleverage.56 Even before the pandemic, the probability that BRI countries would be unable to repay their loans was increasing, with the World Bank estimating nearly one-third of BRI countries to be at high risk of debt distress because of underlying macroeconomic weaknesses.57 By the end of 2019, an estimated $20 billion of BRI projects had been delayed, with another $64 billion put on hold, and $12.6 billion canceled.58 BRI also had run into a series of problems as countries such as Malaysia and Myanmar renegotiated BRI projects to lighten their debt burdens, convinced they were unsustainable and structured to primarily benefit China.59 Other capital-intensive BRI projects in Kyrgyzstan, Nepal, Serbia, Sierra Leone, Tanzania, and Thailand were scaled back, canceled, or stalled.60

The economic fallout of COVID-19 has accelerated these trends. BRI lending continues to slow—China’s Ministry of Foreign Affairs announced one-fifth of BRI projects had been “seriously affected” by COVID-19—and is likely to remain at a more moderate pace.61 Even if China wanted to continue to fund BRI at its pre–COVID-19 pace, it could not, as lockdown restrictions impede Chinese firms’ abilities to send workers and materials to construction sites abroad.62 Demand for Chinese loans has fallen because BRI countries cannot be sure they can generate the economic growth necessary to pay them off. With less margin for error in the face of a global economic recession, BRI has likely entered a new phase of smaller, more rigorous lending to projects that have greater chances of success. BRI’s smaller scale means that the benefits and risks of BRI are likely to be reduced moving forward.

COVID-19–induced crises are exposing the debt sustainability problems brought on by BRI.
 

Debt struggles in many BRI countries predate the initiative, and BRI is one of many factors contributing to countries’ debt distress. At the same time, BRI has exacerbated debt distress, and China’s approach to lending and debt restructurings often compounds these issues.

China’s BRI lending differs from development finance provided by traditional lenders, and the global economic contraction brought on by COVID-19 has exposed the shortcomings of China’s lending approach:

• BRI is predominantly financed by debt, with most projects backed by two state-run policy banks, the China Development Bank (CDB) and the Export-Import Bank of China (China EXIM), and some state-owned commercial banks.63 CDB, the world’s largest provider of development finance, has committed $250 billion to fund BRI projects.64
• China’s central bank provides massive capital injections to China’s policy banks, which also enjoy low borrowing costs. These advantages allow China’s policy banks to subsidize operations linked to BRI and be less demanding than other multinational banks in their lending criteria.65
• In contrast to loans from traditional providers of development finance, China’s loans are generally not concessional, and CDB and China EXIM expect to make a return on their investments.66 The loans also lack policy conditionality; they contain few or no expectations of host country economic or political reforms.67

For many BRI countries, especially authoritarian regimes, this is an attractive package, especially compared with other lenders, who insist on reforms tied to loans.

BRI projects also often omit many of the feasibility and debt sustainability studies conducted by other multinational lenders and move forward rapidly in an effort to reduce project transaction costs.68 The COVID-19 pandemic has revealed the danger in relying on debt issued at close-to-market rates because the economic shock has made it significantly harder for many countries to repay their BRI loans. This prioritization of speed, ostensibly driven by a desire to increase efficiency, increases the risk that a project will not be able to pay for itself.69

Although not setting explicit debt traps, China’s lending practices contribute to debt crises along BRI.
 

China has often been accused of using BRI to set “debt traps”—intentional Chinese efforts to load countries with unsustainable debt that will allow Beijing to seize assets or induce political concessions when debts go unpaid—but there has yet to be a case in which China has taken control of other countries’ infrastructure.70  The notion is largely based on one case—the $1.1 billion Hambantota Port project on Sri Lanka’s southern coast. Sri Lanka’s president, motivated by a desire to develop his home district, initiated this project with China, and most of Beijing’s involvement in the port predated BRI. The ninety-nine-year leasing of the port to a Chinese SOE in 2017 was the result of numerous idiosyncratic factors, including Sri Lanka’s preexisting crippling debt (largely to commercial creditors), balance-of-payments problems, a natural disaster, civil war, and the government’s decision to privatize state assets, allowing China to bid on the port.71

Although BRI countries often do encounter trouble financing projects and seek to renegotiate loan terms, renegotiations often cut in favor of the host country, with Chinese companies accepting losses, calling into question whether a debt-trap strategy would even benefit China.72 In addition, China incurs reputational costs when BRI projects fail. Hambantota is now invoked to demonstrate the perils that come with accepting Chinese financing. The notion of debt traps also robs BRI countries of agency: host governments determine the nature of BRI projects in their countries and have to approve projects and take on the related loans. BRI countries pursue projects that they believe are in their interests; China cannot simply foist unwanted projects on countries.73 Yet, although actual asset seizure may not be the norm, the risk is clear that countries unable to repay their debts to China could become clients of China, deferring to it on political or strategic issues.

Nonetheless, economic stress brought on by COVID-19 could make some BRI projects unsustainable and lead to accusations of debt-trap lending, regardless of China’s intentions. The initiative suffers from a self-selection process whereby many countries opt for BRI projects because they have poor macroeconomic fundamentals and nowhere else to turn for financing. The COVID-19 pandemic has derailed many BRI countries’ already shaky economies, quickening the reckoning with BRI-related debt. Given the long time horizon necessary for large infrastructure projects to generate the growth necessary to pay for themselves, COVID-19 increased debt distress at a time when most BRI projects are not producing any revenue for the host countries. Debt renegotiations have now multiplied, with more on the horizon (see figure 3).

Better deployment of international financial institution (IFI) resources, along with debt relief, is required to meet the needs of vulnerable countries during the COVID-19 pandemic.
 

The International Monetary Fund (IMF) estimates that the COVID-19 pandemic caused the world economy to contract by 3.5 percent in 2020—the most severe global economic cataclysm since the Great Depression.74 The poorest countries have been among the hardest hit, as they lack policy tools to cushion the blow and have experienced capital flight and remittance loss.75 In February 2020, the IMF found that more than half of the world’s low-income countries were in, or at high risk of, debt distress.76 As of June 2020, a major credit rating agency had downgraded to negative its outlook on at least fifteen BRI countries.77 Foreign exchange pressures have also led to a near doubling in debt servicing costs.78 The pandemic has raised the specter of a significant emerging market debt crisis.

Major lenders have tried to respond. In March 2020, the IMF made an open-ended pledge to deploy as much of its $1 trillion of lending capacity as needed to shore up member economies.79 So far, the IMF has provided over $100 billion in financial assistance to 85 of its 189 members and has extended over $280 billion in total lending commitments.80 In addition, MDBs have approved $57 billion of support for needy countries.81 Nearly all of these funds have gone to developing countries. BRI countries—Bangladesh, Egypt, Indonesia, the Maldives, Nigeria, Pakistan, and the Philippines, among others—are among the leading recipients of this international assistance.

Still, a sizable gap remains between the needs of BRI countries and the amount of assistance currently being offered by the IFIs and MDBs. The IMF estimates that emerging markets need at least $2.5 trillion in financing to weather COVID-19–related economic shocks, far greater than what has been pledged.82 New financing from the IFIs cannot meet all of these needs. BRI countries, including Djibouti, Laos, Maldives, Pakistan, and Zambia, among others, have flooded Beijing with requests for renegotiations of loan terms and debt forgiveness.83 Kyrgyzstan announced that it had worked out a settlement with China EXIM, its largest single creditor, to reschedule $1.7 billion of debt repayments.84 CDB has extended its credit line to Sri Lanka by $700 million, lowered the interest rate on loans, and delayed repayment, and Sri Lanka has requested a new $500 million loan from Beijing.85 Nonetheless, numerous debt renegotiations loom on the horizon.

China’s efforts to address emerging debt crises along the Belt and Road have been insufficient.
 

Before the pandemic, China had begun to respond to criticism of its lending practices by

• signing on to the Group of Twenty (G20) Operational Guidelines for Sustainable Financing;
• partnering with the IMF to set up a training center in Beijing to help countries improve their ability to assess debt sustainability;
• inking a memorandum of understanding (MOU) with eight MDBs, establishing a Multilateral Cooperation Center for Development Finance;
• endorsing the G20 Principles for Quality Infrastructure Investment; and
• publishing a debt sustainability framework for BRI that it asserted was similar to the standards used by the IMF and World Bank.86

To date, China has not taken enough action on these pledges. China’s policies are critical to any global debt relief efforts, as it is by far the largest sovereign creditor to the world’s seventy-three poorest countries.87 In response to the pandemic, China has notionally signed on to IMF, World Bank, and G20 debt suspension initiatives.88 Beijing, however, initially insisted that its policy banks, which issue the bulk of BRI loans, are exempt from the Debt Service Suspension Initiative and similar debt relief pledges.89 Only after sustained international pressure did China relent and agree to enter into renegotiations to restructure China EXIM loans, which account for approximately 30 percent of total BRI loans.90 Still, indications are that China continues to insist that CDB loans are ineligible for the Debt Service Suspension Initiative.91 China’s stance underscores its understanding of these projects as commercial ventures rather than pure development activities and risks forcing BRI participants to choose between meeting debt-service requirements to China or funding local economic recovery and critical medical services at a moment of historic crisis.

China is likely to resist canceling many debts related to BRI projects even in the face of this global crisis and will instead push to extend the grace period of loans, increase the maturity of the loans, reschedule payments, and extend lines of credit (see figure 4).92 For example, China agreed to give Kyrgyzstan a deferral on $35 million in debt repayments due in 2020 but added a 2 percent interest rate to the amount.93 China rarely cancels debt, the exception being the relatively small percentage of its lending that is foreign aid given on an interest-free basis. China is likely to push for private bilateral negotiations with each of the BRI countries and make decisions on a case-by-case basis.

China will continue to use ad hoc BRI arrangements to gain access to BRI country markets.
 

Xi Jinping has emphasized BRI’s goal of “advanc[ing] the building of free trade areas and promot[ing] liberalization and facilitation of trade and investment.”94 China’s thirteenth Five Year Plan committed to a swift process of fulfilling Xi’s wish, stating, “We will speed up efforts to implement the free trade area strategy, gradually establishing a network of high-standard free trade areas. We will actively engage in negotiations with countries and regions along the routes of the Belt and Road Initiative on the building of free trade areas.”95

Until the Regional Comprehensive Economic Partnership (RCEP) was signed in November 15, 2020, however, little progress had been made in negotiating such free trade agreements. Started by the ten members of the Association of Southeast Asian Nations (ASEAN), RCEP adds Australia, China, Japan, New Zealand, and South Korea, resulting in an agreement connecting nearly 30 percent of the world’s people and output. All RCEP members except Australia and Japan are also BRI countries, thereby creating baseline rules governing trade, investment, intellectual property protection, government procurement, and competition policy for this subset of BRI countries.

Many of the rules in RCEP do not extend much past the basic World Trade Organization (WTO) trading rules. The agreement’s provisions on e-commerce, digital trade, competition, and government procurement, however, as well as the important rules of origin that permit inputs from any RCEP country to be counted together when determining whether a good qualifies for RCEP preferences, are significant.96 Because many of the tariffs on goods traded among RCEP members are already low or will not change as a result of the agreement, RCEP could have limited immediate economic effect.97 RCEP can, however, be expected to incentivize supply chains to operate within the region and to enhance the gains from BRI’s strengthened transport, energy, and telecommunications links among RCEP members.98 RCEP also signals a greater willingness among these Asian countries to work together without the United States. The agreement is likely to promote further integration of these economies and solidify China’s position as the center of Asian trade and investment.

RCEP notwithstanding, China has few trade or investment agreements with its other BRI partners. Outside of RCEP, the lack of deep, transparent agreements establishing reciprocal market access between China and its BRI partners has given China more flexibility, as its ad hoc BRI arrangements are more opaque and contain fewer basic requirements. One-off bilateral deals also give little indication about whether any increased access to BRI markets, including to the Chinese market, will be available to others or limited to preferential access for firms pursuing a BRI project. Moreover, the ad hoc, secretive nature of most BRI contracts makes it difficult for countries to take collective action in responding to China should they believe the terms of the contracts are unfair.

What is clear is that China’s trade with BRI countries has been growing more rapidly than its trade with non-BRI countries. In 2019, China’s total trade with BRI partners was $1.34 trillion, 7.4 percent higher than its aggregate growth in trade.99 China’s exports to BRI countries also far exceeded its imports, in part because BRI countries have imported a significant amount of construction equipment and building materials from China. For the United States, the absence of transparent agreements establishing basic market access, contract, and procurement rules leaves U.S. companies uncertain of what their rights could be should they wish to participate in BRI projects.

Despite the global economic slowdown, BRI countries will continue to seek Chinese loans and Beijing will continue to fund BRI projects.
 

China’s own debt burden and its need to devote resources to boosting economic growth at home have raised questions about its ability to continue funding BRI, particularly if forced to choose between investing more in its own economy or in BRI countries.100 BRI lending, however, remains a small portion of Chinese banks’ overall investment portfolios. Chinese policy banks enjoy strong political support and have ample room to continue to lend to BRI countries. At the peak of BRI, China was estimated to have lent $50 to 60 billion annually, a fraction of the $2.6 trillion in annual Chinese bank lending.101 BRI’s two main funders, CDB and China EXIM, had committed only 2.9 percent and 3.1 percent of their assets, respectively, to BRI as of the end of 2018.102 In addition, given that other multinational lenders outside of China are retrenching at a moment of upheaval, China can lend at a smaller scale than it did prior to the pandemic and still make a significant impact on recipient states and potentially generate political goodwill as well.

BRI will endure as countries continue to request that Beijing fund additional projects, despite the global economic cataclysm and their rising debt burdens, and as China maintains the capacity to lend. For example, despite the fact that the signature China-Pakistan Economic Corridor (CPEC)—an initiative that is explored in more detail below—was already behind schedule and over budget, in July 2020 the two countries announced $11 billion of new rail and hydropower projects in the corridor.103 That same month, China also announced a twenty-five-year, $400 billion slate of investments in Iran, for which it will receive a regular and heavily discounted supply of Iranian oil in exchange.104

Although China will continue to build traditional infrastructure in BRI countries, it will likely shift its emphasis toward less costly yet influential projects through the Digital (DSR) and Health Silk Roads (HSR):105

• After the COVID-19 outbreak, senior Chinese government officials have emphasized that digital projects could help BRI countries’ economic recovery.106 In December 2020, Chinese Foreign Minister Wang Yi signaled Beijing would make this shift, declaring the “Digital Silk Road is a priority area for BRI cooperation in the next stage.”107
• Moreover, the pandemic itself is likely to generate demand for DSR projects in BRI countries as economic activity continues to move online.108
• Finally, faced with the increasing prospect that they could be excluded from the U.S. market and those of U.S. allies in Europe and Asia, Chinese telecommunications and internet companies want to boost their market share in other regions and could redouble their DSR efforts in Africa, Central Asia, and South and Southeast Asia.109

• 30

  From Silk Road to Silicon Road (Chartered Institute of Building, May 2019); and François de Soyres, Alen Mulabdic, Siobhan Murray, Nadia Rocha, and Michele Ruta, “How Much Will the Belt and Road Initiative Reduce Trade Costs?,” World Bank Group Policy Research Working Paper 8614 (October 2018).

• 31Daniel Russel and Blake Berger, <a href="http://asiasociety.org/sites/default/files/2019-06/Navigating%20the%20Belt%20and%20Road%20Initiative_2.pdf"><em>Navigating the Belt and Road Initiative</em></a> (Asia Society Policy Institute, June 2019).
• 32Stephen G. Cecchetti, M. S. Mohanty, and Fabrizio Zampolli, “<a href="http://bis.org/publ/work352.htm">The Real Effects of Debt</a>,” Bank for International Settlements (BIS) Working Paper No. 352 (September 2011).
• 33Davide Furceri and Aleksandra Zdzienicka, “<a href="http://imf.org/en/Publications/WP/Issues/2016/12/31/How-Costly-Are-Debt-Crises-25400">How Costly Are Debt Crises?</a>” IMF Working Paper No. 11/280 (December 2011).
• 34Johnathan Hillman, “<a href="http://uscc.gov/sites/default/files/Hillman_USCC%20Testimony_25Jan2018_FINAL.pdf">China’s Belt and Road Initiative: Five Years Later: Statement Before the Economic and Security Review Commission</a>,” January 25, 2018, 3.
• 35“<a href="http://enr.com/toplists/2020-Top-250-Global-Contractors-Preview">ENR 2020 Top 250 Global Contractors</a>,” Engineering News-Record, 2020.
• 36

  David M. Lampton, Selina Ho, and Cheng-Chwee Kuik, Rivers of Iron: Railroads and Chinese Power in Southeast Asia (University of California Press, 2020).

• 37Lampton, Ho, and Kuik, <em>Rivers of Iron</em>; and Randall Phillips, “<a href="http://uscc.gov/sites/default/files/Phillips_USCC%20Testimony_17Jan2018.pdf">Creating Market and Cultivating Influence: Testimony Before the U.S.-China Economic and Security Review Commission</a>,” January 25, 2018.
• 38Asli Demirgüç-Kunt, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess, <a href="http://globalfindex.worldbank.org"><em>The Global Findex Database</em></a> (World Bank, 2017).
• 39Paul Triolo, Kevin Allison, and Clarise Brown, <a href="http://eurasiagroup.net/live-post/digital-silk-road-expanding-china-digital-footprint"><em>The Digital Silk Road: Expanding China’s Digital Footprint</em></a> (Eurasia Group, April 2020).
• 40Jack O’Dwyer, “<a href="http://1421.consulting/2020/02/fintech-in-china-growth-drivers-trends">FinTech in China: Growth Drivers and Trends</a>,” 1421, February 20, 2020.
• 41Triolo, Allison, and Brown, <a href="http://eurasiagroup.net/live-post/digital-silk-road-expanding-china-digital-footprint"><em>The Digital Silk Road</em></a>.
• 42Rita Liao, “<a href="https://techcrunch.com/2020/07/14/ant-alibaba-1-3-billion-users/">Jack Ma’s Fintech Giant Tops 1.3 Billion Users Globally</a>,” TechCrunch, July 15, 2020. In 2019, Ant Group processed $17 trillion of transactions in mainland China, and a further $90 billion overseas. Peter Guest, “<a href="http://restofworld.org/2020/ant-group-financial-empire">How Ant Group Built a $200 Billion Financial Empire</a>,”<br /> Rest of World, September 8, 2020.
• 43Triolo, Allison, and Brown, <a href="http://eurasiagroup.net/live-post/digital-silk-road-expanding-china-digital-footprint"><em>The Digital Silk Road</em></a>.
• 44“<a href="http://paymentsjournal.com/quantifying-alipay-wechat-pays-phenomenal-growth">Quantifying Alipay & WeChat Pay’s Phenomenal Growth</a>,” <em>PaymentsJournal</em>, September 3, 2020; and “<a href="http://economist.com/finance-and-economics/2020/08/06/do-alipay-and-tenpay-misuse-their-market-power">Do Alipay and Tenpay Misuse Their Market Power?</a>,” <em>Economist</em>, August 6, 2020.
• 45Economist Intelligence Group on Behalf of HSBC, “<a href="https://www.business.hsbc.com/belt-and-road/bri-rising-to-the-fintech-challenge?cid=HBUK:JG:788:S2:CMB:L14:TW:HPP:0:XEG:18:0818:004:ChinaIntl">BRI: Rising to the Fintech Challenge</a>,” HSBC, August 9, 2018.
• 46Economist Intelligence Group on Behalf of HSBC, “<a href="https://www.business.hsbc.com/belt-and-road/bri-rising-to-the-fintech-challenge?cid=HBUK:JG:788:S2:CMB:L14:TW:HPP:0:XEG:18:0818:004:ChinaIntl">BRI: Rising to the Fintech Challenge</a>.”
• 47“<a href="http://ledgerinsights.com/chinas-national-blockchain-infrastructure-bsn">China’s National Blockchain Infrastructure Takes Shape</a>,“ <em>Ledger Insights</em>, 2019; and Yaya J. Fanusie, “<a href="http://lawfareblog.com/dont-sleep-chinas-new-blockchain-internet">Don’t Sleep on China’s New Blockchain Internet</a>,” November 10, 2020.
• 48

  Blockchain-based Service Network Introductory White Paper (BSN Development Association: September 2019).

• 49Ting Peng, “<a href="http://cointelegraph.com/news/chinas-blockchain-service-network-integrates-three-more-public-chains">China’s Blockchain Service Network Integrates Three More Public Chains</a>,” <em>Cointelegraph</em>, September 16, 2020.
• 50Fanusie, “<a href="http://lawfareblog.com/dont-sleep-chinas-new-blockchain-internet">Don’t Sleep on China’s New Blockchain Internet</a>.”
• 51BSN Development Association, <a href="http://liandufin.top/incubator/file/Blockchain-based%20Service%20Network%20(BSN)%20Introductory%20White%20Paper.pdf"><em>Blockchain-based Service Network Introductory White Paper</em></a>.
• 52Nadia Schadlow and Richard Kang, “<a href="https://www.foreignaffairs.com/articles/china/2021-01-13/financial-technology-chinas-trojan-horse">Financial Technology Is China’s Trojan Horse</a>,” <em>Foreign Affairs</em>, January 13, 2021.
• 53Rita Liao, “<a href="http://techcrunch.com/2020/11/09/tencent-vs-alibaba-ant-fintech">The Race to Be China’s Top Fintech Platform: Ant Vs. Tencent</a>,” <em>TechCrunch</em>, November 9, 2020, “<a href="http://supchina.com/2020/02/14/chinese-fintech-giants-expand-across-the-belt-and-road">Chinese Fintech Giants Expand Across the Belt and Road</a>,” <em>SupChina</em>, February 14, 2020.
• 54Fanusie, “<a href="http://lawfareblog.com/dont-sleep-chinas-new-blockchain-internet">Don’t Sleep on China’s New Blockchain Internet</a>.”
• 55Yaya J. Fanusie and Emily Jin, “<a href="http://cnas.org/publications/reports/chinas-digital-currency">China’s Digital Currency: Adding Financial Data to Digital Authoritarianism</a>,” Center for New American Security, January 26, 2021.
• 56Jevans Nyabiage, “<a href="http://scmp.com/news/china/diplomacy/article/3051466/chinese-lenders-turn-taps-international-energy-projects-debt">Chinese Lenders Turn Off the Taps on International Energy Projects As ‘Debt Trap Diplomacy’ Criticisms Mount</a>,” South China Morning Post, February 20, 2020; Kratz, Rosen, and Mingey, “<a href="http://rhg.com/research/booster-or-brake-covid-and-the-belt-and-road-initiative;">Booster or Brake?</a>;" and Haibin Zhu, Karen Li, Katherine Lei, and Grace Ng, “A Stress Test for China’s Overseas Lending,” JPMorgan Global Economic Research Note, July 9, 2020.
• 57John Hurley, Scott Morris, and Gailyn Portelance, <em><a href="http://cgdev.org/sites/default/files/examining-debt-implications-belt-and-road-initiative-policy-perspective.pdf">Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective</a></em>, CGD Policy Paper 121 (Washington, DC: Center for Global Development, March 2018); Luca Bandiera and Vasileios Tsiropoulos, “<a href="http://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-8891">A Framework to Assess Debt Sustainability and Fiscal Risks Under the Belt and Road Initiative</a>,” World Bank Policy Research Working Paper 8891, June 2019.
• 58

  BRI Connect: An Initiative in Numbers, 3rd ed. (Refinitiv).

• 59Tom Mitchell and Alice Woodhouse, “<a href="http://ft.com/content/660ce336-5f38-11e9-b285-3acd5d43599e">Malaysia Renegotiated China-backed Rail Project to Avoid $5bn Fee</a>,” <em>Financial Times</em>, April 15, 2019; and Kanupriya Kapoor and Aye Min Thant, “<a href="http://reuters.com/article/us-myanmar-china-port-exclusive/exclusive-myanmar-scales-back-chinese-backed-port-project-due-to-debt-fears-official-idUSK…">Exclusive: Myanmar Scales Back Chinese-backed Port Project Due to Debt Fears – Official</a>,” Reuters, August 2, 2018.
• 60“<a href="http://silkroadbriefing.com/news/2020/02/28/kyrgyzstan-cancels-china-logistics-super-hub-investment-al-bashy-protests">Kyrgyzstan Cancels China Logistics Super-Hub Investment After At-Bashy Protests</a>,” <em>Silk Road Briefing</em>, February 28, 2020, “<a href="http://asia.nikkei.com/Spotlight/Belt-and-Road/Thai-Belt-and-Road-project-bumps-into-finance-and-liability-issues">Thai Belt and Road Project Bumps Into Finance and Liability Issues</a>,” <em>Nikkei Asian Review</em>, September 12, 2019; and “<a href="http://asia.nikkei.com/Spotlight/Belt-and-Road/Cautious-EU-holds-China-s-Europe-ambitions-in-check">Cautious EU Holds China’s Europe Ambitions in Check</a>,” <em>Nikkei Asian Review</em>, July 28, 2019.
• 61“<a href="http://reuters.com/article/us-health-coronavirus-china-silkroad/china-says-one-fifth-of-belt-and-road-projects-seriously-affected-by-pandemic-idUSKBN…">China Says One-Fifth of Belt and Road Projects ‘Seriously Affected’ by Pandemic</a>,” Reuters, June 18, 2020.
• 62Dzulfiqar Fathur Rahman, “<a href="http://thejakartapost.com/news/2020/04/15/jakarta-bandung-high-speed-railway-project-delayed-amid-pandemic.html">Jakarata-Bandung High-Speed Railway Project Delayed Amid Pandemic</a>,” <em>Jakarta Post</em>, April 15, 2020.
• 63Gabriel Wildau and Nan Ma, “<a href="http://ft.com/content/18db2e80-3571-11e7-bce4-9023f8c0fd2e">In Charts: China’s Belt and Road Initiative</a>,” <em>Financial Times</em>, May 10, 2017, “<a href="http://brookings.edu/wp-content/uploads/2016/07/aid-procurement-africa-zhang-gutman.pdf">Aid Procurement and the Development of Local Industry: A Question for Africa</a>,” Brookings Institution Global Economy and Development Working Paper 88, June 2015.
• 64Nikki Sun, “<a href="http://asia.nikkei.com/Economy/China-Development-Bank-commits-250bn-to-Belt-and-Road">China Development Bank Commits $250bn to Belt and Road</a>,” <em>Nikkei Asian Review</em>, January 15, 2018.
• 65Hale, Liu, and Urpelainen, <a href="http://sais-isep.org/wp-content/uploads/2020/04/ISEP-BSG-BRI-Report-.pdf"><em>Belt and Road Decision-Making in China and Recipient Countries</em></a>.
• 66For example, between 2000 and 2014, U.S. official finance was $394.6 billion, of which $366.4 billion (or 93 percent) was official development assistance given on concessional terms. Over that same period, China’s official finance was $354.3 billion, of which only $81.1 billion (or 23 percent) was official development assistance. AidData, “<a href="http://aiddata.org/china-official-finance">China’s Global Development Footprint</a>,” AidData, accessed December 29, 2020; and Scott Morris, Brad Parks, and Alysha Gardner, <a href="http://cgdev.org/publication/chinese-and-world-bank-lending-terms-systematic-comparison"><em>Chinese and World Bank Lending Terms: A Systematic Comparison Across 157 Countries and 15 Years</em></a>, CGD Policy Paper 170 (Center for Global Development: April 2, 2020).
• 67Veasna Kong, Steven G. Cochrane, Brendan Meighan, and Matthew Walsh, <a href="http://moodysanalytics.com/-/media/article/2019/belt-and-road-initiative.pdf"><em>The Belt and Road Initiative Six Years On</em></a> (Moody’s Analytics, June 2019).
• 68Bushra Bataineh, Michael Bennon, Francis Fukuyama, “<a href="http://cddrl.fsi.stanford.edu/publication/how-belt-and-road-gained-steam-causes-and-implications-china%E2%80%99s-rise-global">How the Belt and Road Gained Steam: The Causes and Implications of China’s Rise in Global Infrastructure</a>,” Stanford Center on Development, Democracy, and the Rule of Law, May 2019.
• 69Russel and Berger, <a href=" http://asiasociety.org/sites/default/files/2019-06/Navigating%20the%20Belt%20and%20Road%20Initiative_2.pdf"><em>Navigating the Belt and Road Initiative</em></a>.
• 70Roland Rajah, Alexandre Dayant, and Jonathan Pryke, <em><a href="https://www.lowyinstitute.org/publications/ocean-debt-belt-and-road-and-debt-diplomacy-pacific">Ocean of Debt? Belt and Road and Debt Diplomacy in the Pacific</a></em> (Lowy Institute, October 21, 2019); Deborah Brautigam, “<a href="https://www.tandfonline.com/doi/full/10.1080/23792949.2019.1689828">A Critical Look at Chinese ‘Debt-Trap Diplomacy’: The Rise of a Meme</a>,” Area Development and Policy 5 (2020); and Agatha Kratz, Matthew Mingey, and Drew D’Alelio, <em><a href="https://rhg.com/%20wp-content/uploads/2020/10/RHG_SeekingRelief_8Oct2020_Final.pdf">Seeking Relief: China’s Overseas Debt After COVID-19</a></em> (Rhodium Group, October 8, 2020).
• 71Meg Rithmire and Yihao Li, “<a href="https://www.hbs.edu/faculty/Pages/item.aspx?num=55410">Chinese Infrastructure Investment in Sri Lanka: A Peal or a Teardrop on the Belt and Road?</a>,” Harvard Business School Case 718–046, January 2019; Jones and Hameiri, and <em>Debunking the Myth of ‘Debt-trap Diplomacy'.</em>
• 72Agatha Kratz, Allen Feng, and Logan Wright, “<a href="https://rhg.com/research/new-data-on-the-debt-trap-question/">New Data on the Debt Trap Question</a>,” Rhodium Group, April 26, 2019.
• 73Jones and Hameiri, Debunking the Myth of ‘Debt-trap Diplomacy’.
• 74

  World Economic Outlook Update (International Monetary Fund, October 2020).

• 75Antoinette Sayeh and Ralph Chami, “<a href="https://www.imf.org/external/pubs/ft/fandd/2020/06/COVID19-pandemic-impact-on-remittance-flows-sayeh.htm">Lifelines in Danger</a>,” Finance & Development 57, no. 2 (June 2020).
• 76

  The Evolution of Public Debt Vulnerabilities in Lower Income Economies, Policy Paper No. 20/003 (International Monetary Fund, February 10, 2020).

• 77Marc Jones, “<a href="http://reuters.com/article/us-health-coronavirusratings-downgrades/coronavirus-pushes-global-credit-rating-downgrade-threatto-record-high-idUSKBN2331…">Coronavirus Pushes Global Credit Rating Downgrade Threat to Record High</a>,” Reuters, May 27, 2020.
• 78Bank for International Settlements, “<a href="http://bis.org/statistics/totcredit.htm?m=6%7C380%7C669">Credit to the Non-Financial Sector</a>,” updated December 7, 2020.
• 79Kristalina Georgieva, “<a href="https://blogs.imf.org/2020/03/16/policy-action-for-a-healthy-global-economy/">Policy action for a Healthy Global Economy</a>,” IMFBlog (blog), March 16, 2020.
• 80“<a href="https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker">COVID-19 Financial Assistance and Debt Service Relief</a>,” International Monetary Fund, updated December 21, 2020; and “<a href="https://www.imf.org/en/About/FAQ/imf-response-to-covid-19">The IMF’s Response to COVID-19</a>,” International Monetary Fund, updated October 28, 2020.
• 81Stephanie Segal, “<a href=" http://csis.org/analysis/ tracking-international-financial-institutions-covid-19-response">Tracking International Financial Institutions’ COVID-19 Response</a>,” Center for Strategic and International Studies, July 21, 2020.
• 82"<a href="http://economictimes.indiatimes.com/news/international/business/ chinas-trade-with-bri-countries-surges-to-1-34-trillion-in-2019/articleshow/ 73271222.cms">China’s Trade With BRI Countries Surges to $1.3 Trillion in 2019</a>,” Economic Times, January 15, 2020.
• 83Sébastien Thibault, “<a href="https://www.economist.com/china/2020/06/04/the-pandemic-is-hurting-chinas-belt-and-road-initiative">The Pandemic Is Hurting China’s Belt and Road Initiative</a>,” Economist, June 4, 2020; Ministry of Foreign Affairs of the People’s Republic of China, “<a href="https://www.fmprc.gov.cn/mfa_eng/wjb_663304/zygy_663314/gyhd_663338/t1787197.shtml">Vice Foreign Minister Ma Zhaoxu Briefs on China’s Participation in International Cooperation in COVID-19 Response</a>,” Ministry of Foreign Affairs of the People’s Republic of China, June 8, 2020; and James Kynge and Sun Yu, “<a href="https://www.ft.com/content/5a3192be-27c6-4fe7-87e7-78d4158bd39b">China Faces Wave of Calls for Debt Relief on ‘Belt and Road’ Projects</a>,” Financial Times, April 30, 2020.
• 84Aida Dzhumashova, “<a href="http://24.kg/english/151447_Exim_Bank_of_China_ to_reschedule_debt_of_Kyrgyzstan_">Exim Bank of China to Reschedule Debt of Kyrgyzstan</a>,” 24.kg News Agency, April 29, 2020.
• 85"<a href="http://economictimes.indiatimes.com/news/international/business/ chinas-trade-with-bri-countries-surges-to-1-34-trillion-in-2019/articleshow/ 73271222.cms">China’s Trade With BRI Countries Surges to $1.3 Trillion in 2019</a>,” Economic Times, January 15, 2020.
• 86G20, “<a href="http:// bundesfinanzministerium.de/Content/EN/Standardartikel/Topics/world/G7-G20/ G20-Documents/g20-operational-guidelines-for-sustainable-financing.pdf?__ blob=publicationFile&v=1">Operational Guidelines for Sustainable Financing</a>,” March 2017; “<a href="http://imf.org/en/Capacity-Development/Training/ ICDTC/Schedule/CT">IMF Institute Training at China-IMF Capacity Development Center (CICDC), Beijing, China</a>,” International Monetary Fund, accessed December 29, 2020; “<a href="http://imfcicdc.org/content/cicdc/en.html">Welcome to CICDC</a>,” China-IMF Capacity Development Center, accessed December 29, 2020; Ministry of Finance of the People’s Republic of China and Asian Development Bank et al., “<a href="http:// aiib.org/en/about-aiib/who-we-are/partnership/_download/collaboration-on-matters. pdf">Memorandum of Understanding on Collaboration on Matters to Establish the Multilateral Cooperation Center for Development Finance</a>,” March 25, 2019; G20, “<a href="http://mof. go.jp/english/international_policy/convention/g20/annex6_1.pdf">Principles for Quality Infrastructure Investment</a>,” June 2019; and Frank Tang, “<a href="https://www.scmp.com/news/china/diplomacy/article/3007714/china-seeks-allay-belt-and-road-debt-trap-concerns-standard">China Seeks to Allay Belt and Road ‘Debt Trap’ Concerns With Standard for Assessing Financial Risk</a>,” South China Morning Post, April 25, 2019.
• 87Anuj Chopra, “<a href="http://barrons.com/news/ g20-declares-framework-on-debt-relief-for-poor-nations-01605277203?tesla=y">G20 Declares Framework to Deepen Debt Relief for Poor Nations</a>,” Agence France-Presse, November 13, 2020.
• 88World Bank Group and IMF, “<a href="https://www.imf.org/en/News/Articles/2020/03/25/pr20103-joint-statement-world-bank-group-and-imf-call-to-action-on-debt-of-ida-countries">Joint Statement World Bank Group and IMF Call to Action on Debt of IDA Countries</a>,” International Monetary Fund Press Release No. 20/103, March 25, 2020.
• 89G20, “<a href="http://g20.utoronto.ca/2020/2020-g20-finance-0415. html">Communiqué: Virtual Meeting of the G20 Finance Ministers and Central Bank Governors</a>,” April 15, 2020; G20, “<a href="http://g20.org/en/media/Documents/Final%20 G20%20FMCBG%20Communiqu%C3%A9%20-%20July%202020.pdf">Communiqué: Virtual Meeting of the G20 Finance Ministers and Central Bank Governors</a>,” July 18, 2020; Andrea Shalal, “<a href="http://reuters.com/article/us-health-coronavirus-g7/ g7-ministers-urge-full-implementation-of-g20-debt-freeze-u-s-treasuryidUSKCN24E1SX">G7 ministers urge full implementation of G20 debt freeze: U.S. Treasury</a>,” Reuters, July 13, 2020; Jeremy Mark, “<a href="http://atlanticcouncil.org/blogs/ new-atlanticist/where-does-china-really-stand-on-debt-relief">Where Does China Really Stand on Debt Relief?</a>” New Atlanticist (blog), Atlantic Council, June 8, 2020; Abi-Habib and Bradsher, “Poor Countries Borrowed Billions From China.”; Steil and Della Rocca, “Chinese Debt Could Cause Emerging Markets to Implode”; and Kynge and Yu, “China Faces Wave of Calls for Debt Relief on ‘Belt and Road’ Projects.”
• 90Liangyu, “<a href="http://xinhuanet.com/english/2019-04/21/c_137996270.htm">China’s Exim Bank’s B&R Loans Surpasses 1 Trln Yuan</a>,” XinhuaNet, April 21, 2019; Jason Lee, “<a href="http://reuters.com/article/us-china-finance-cdb-bri/chinadevelopment-bank-provides-over-190-billion-for-belt-and-road-projectsidUSKCN1R8095">China Development Bank Provides Over $190 Billion for Belt and Road Projects</a>,” Reuters, March 26, 2019; and Camilla Hodgson, “<a href="https://www.ft.com/content/6900c595-151b-4cfd-90bb-0be9967b7999">China Strikes Debt Deals With Poor Nations Under G20 Scheme</a>,” Financial Times, August 30, 2020.
• 91Kevin Acker, “<a href="https://pandapawdragonclaw.blog/2020/08/31/what-we-know-about-chinas-approach-to-debt-relief-insights-from-two-decades-of-china-africa-debt-restructu…">What We Know About China’s Approach to Debt Relief: Insights From Two Decades of China-Africa Debt Restructuring</a>,” Panda Paw Dragon Claw (blog), August 31, 2020; and Bandiera and Tsiropoulos, “A Framework to Assess Debt Sustainability.”
• 92Deborah Brautigam, “<a href="http://thediplomat.com/2020/04/chinese-debt-relief-fact-and-fiction">Chinese Debt Relief: Fact and Fiction</a>,” Diplomat, April 15, 2020; Joe Bavier, “<a href="http://reuters.com/article/us-congorepublic-imf/imf-approves-congo-republic-bailoutafter-china-debt-deal-idUSKCN1U62NR">IMF Approves Congo Republic Bailout After China Debt Deal</a>,” Reuters, July 11, 2019; and Kratz, Mingey, and D’Alelio, Seeking Relief.
• 93Paul Bartlett, “<a href="https://asia.nikkei.com/Politics/International-relations/China-offers-cash-strapped-Kyrgyzstan-a-glimmer-of-hope-on-debt">China Offers Cash-Strapped Kyrgyzstan a Glimmer of Hope on Debt</a>,” Nikkei Asian Review, December 3, 2020.
• 94Organization of Economic Cooperation and Development, <a href="https://www.oecd.org/finance/Chinas-Belt-and-Road-Initiative-in-the-global-trade-investment-and-finance-landscape.pdf"><em>China’s Belt and Road Initiative in the Global Trade, Investment and Finance Landscape </em></a>(OECD, 2018), 13.
• 95"<a href="http://economictimes.indiatimes.com/news/international/business/ chinas-trade-with-bri-countries-surges-to-1-34-trillion-in-2019/articleshow/ 73271222.cms">China’s Trade With BRI Countries Surges to $1.3 Trillion in 2019</a>,” Economic Times, January 15, 2020.
• 96“<a href="https://www.dfat.gov.au/trade/agreements/not-yet-in-force/rcep/rcep-text-and-associated-documents">RCEP Text and Associated Documents</a>,” Australian Government Department of Foreign Affairs and Trade, accessed December 29, 2020.
• 97Peter A. Petri and Michael Plummer, “<a href="https://www.brookings.edu/blog/order-from-chaos/2020/11/16/rcep-a-new-trade-agreement-that-will-shape-global-economics-and-politics/">A New Trade Agreement That Will Shape Global Economics and Politics</a>,” Order From Chaos (blog), Brookings Institution, November 16, 2020.
• 98"<a href="http://economictimes.indiatimes.com/news/international/business/ chinas-trade-with-bri-countries-surges-to-1-34-trillion-in-2019/articleshow/ 73271222.cms">China’s Trade With BRI Countries Surges to $1.3 Trillion in 2019</a>,” Economic Times, January 15, 2020.
• 99"<a href="http://economictimes.indiatimes.com/news/international/business/ chinas-trade-with-bri-countries-surges-to-1-34-trillion-in-2019/articleshow/ 73271222.cms">China’s Trade With BRI Countries Surges to $1.3 Trillion in 2019</a>,” Economic Times, January 15, 2020.
• 100David F. Gordon, Haoyu Tong, and Tabatha Anderson, <a href="https://www.iiss.org/blogs/research-paper/2020/03/beyond-the-myths-of-the-bri"><em>Beyond the Myths – Towards a Realistic Assessment of China’s Belt and Road Initiative: The Development-Finance Dimension</em></a> (The International Institute for Strategic Studies, March 2020).
• 101Kratz, Rosen, and Mingey, “Booster or Brake? COVID and the Belt and Road Initiative.”
• 102Haibin Zhu, Karen Li, Katherine Lei, and Grace Ng, “A Stress Test for China’s Overseas Lending.”
• 103Faseeh Mangi, “<a href="https://www.bloomberg.com/news/newsletters/2020-07-21/supply-chains-latest-pakistan-helps-revive-china-s-belt-and-road">China’s Belt and Road Awakens With a Push Through Pakistan</a>,” Bloomberg, July 21, 2020.
• 104Adnan Aamir, “<a href="https://asia.nikkei.com/Spotlight/Belt-and-Road/China-Iran-deal-overshadows-Pakistan-Belt-and-Road-project">China-Iran Deal Overshadows Pakistan Belt and Road Project</a>,” Nikkei Asian Review, July 21, 2020; Farnaz Fassihi and Steven Lee Myers, “<a href="https://www.nytimes.com/2020/07/11/world/asia/china-iran-trade-military-deal.html">Defying U.S., China and Iran Near Trade and Military Partnership</a>,” New York Times, July 11, 2020.
• 105Jude Blanchette and Jonathan Hillman, “<a href="http://csis.org/analysis/chinas-digital-silk-road-after-coronavirus">China’s Digital Silk Road After the Coronavirus</a>,” Over the Horizon (blog), Center for Strategic and International Studies, April 13, 2020.
• 106Ministry of Foreign Affairs of the People’s Republic of China, “<a href="https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1790439.shtml">State Councilor and Foreign Minister Wang Yi Chairs the High-level Video Conference on Belt and Road International Cooperation</a>,” Ministry of Foreign Affairs of the People’s Republic of China, June 19, 2020; Ministry of Foreign Affairs of the People’s Republic of China, “<a href="https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1798656.shtml">Foreign Ministry Spokesperson Hua Chunying’s Regular Press Conference on July 17, 2020</a>,” Ministry of Foreign Affairs of the People’s Republic of China, July 18, 2020.
• 107“<a href="https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1841816.shtml">Wang Yi Attends the Meeting of the Advisory Council of the Belt and Road Forum for International Cooperation</a>,” Ministry of Foreign Affairs of the People’s Republic of China, December 19, 2020.
• 108Davide Strusani and Georges V. Houngbnon, <a href="https://www.ifc.org/wps/wcm/connect/publications_ext_content/ifc_external_publication_site/publications_listing_page/what+covid+19+means+for+digital+…"><em>What COVID-19 Means for Digital Infrastructure in Emerging Markets</em></a> (International Finance Corporation, May 2020).
• 109George Parker, Nic Fildes, Helen Warrel, and Demetri Sevastopulo, “<a href="https://www.ft.com/content/997da795-e088-467e-aa54-74f76c321a75">UK Orders Ban of New Huawei Equipment From End of Year</a>,” Financial Times, July 14, 2020; Li Tao, “<a href="https://www.scmp.com/tech/tech-leaders-and-founders/article/2177194/japan-decides-exclude-huawei-zte-government">Japan Latest Country to Exclude Huawei, ZTE From 5G Roll-out Over Security Concerns</a>,” South China Morning Post, December 10, 2018; Momoko Kidera, “<a href="https://asia.nikkei.com/Spotlight/Huawei-crackdown/Huawei-s-deep-roots-put-Africa-beyond-reach-of-US-crackdown">Huawei’s Deep Roots Put Africa Beyond Reach of US Crackdown</a>,” Nikkei Asian Review, August 15, 2020.

China’s investments along BRI have increased its soft power, but such gains are fragile and have shown signs of reversal.
 

BRI projects have a strong signaling value, furthering a narrative in host countries that their future prosperity is inextricably tied to strong relations with Beijing. Even the European Union (EU), with seventeen of its twenty-seven member states signing on to BRI, entered into the EU-China Comprehensive Agreement on Investment (CAI) in December 2020, despite an admonition from the incoming Joe Biden administration to wait and join forces with the United States on a common approach to China.124 Although the CAI gives European companies invested in China some market access assurance, for China it represents a major geopolitical victory, furthering the story of a strong country with deep economic ties in Europe standing tall on the world stage.125 Heads of state converge on Beijing for Belt and Road forums, where they hear from Xi Jinping and sign deals for infrastructure projects along with joint communiques that thank China for hosting such events.126 At the Second Belt and Road Forum, UN Secretary-General Antonio Guterres lauded BRI’s “immense potential,” praised it for having “sustainable development as the overarching objective,” and pledged the “United Nations system stands ready to travel this road with you.”127 BRI can thus be seen as an integral element of a broader strategy to bolster China’s geopolitical influence and international standing.128

In large part because of BRI, many believe China is a more significant economic actor than the United States, even though U.S. private-sector investment usually outstrips Chinese investment. Although U.S. firms invest globally, they are not seen as appendages of the state, and often, publics do not even know these are U.S. companies. Those U.S. firms participating in BRI projects often do so as subcontractors or background service providers such that U.S. logos may never appear at a construction site. By contrast, the presence of Chinese firms is much more visible. Thus, although the stock of U.S. direct investment in Southeast Asian countries outweighs investment by Chinese companies, a survey of Southeast Asians revealed that 79 percent of respondents believed China had the most economic influence in Southeast Asia, while only 8 percent believed the United States was the preeminent economic power in the region.129 Fifty-two percent believed China was also the most influential political and strategic actor, compared with 27 percent for the United States, and 47 percent expressed little or no confidence in the United States as a strategic partner.130

The same pattern holds in Africa, where the stock of U.S. direct investment on the continent remains higher than Chinese investment, but publics perceive China to be the most influential economic actor.131 A survey of people in thirty-six African countries found that they believe China exerts more external influence in their country than the United States, trailing only their former colonial power. The most important factor contributing to this assessment was China’s investment in infrastructure on the continent, driven by BRI.132

Although BRI has the potential to strengthen China’s hard and soft power, missteps with some projects, corruption scandals, increasing awareness of debt burdens, resentment over the substantial inflow of Chinese labor displacing local workers, and the loss of local autonomy over projects have combined to limit BRI’s contribution to the growth of China’s power. Public protests in BRI countries have become increasingly common. In Sri Lanka and Cambodia, for example, citizens have protested being displaced for BRI projects and not receiving promised compensation.133 The same survey of Southeast Asians revealed that 64 percent have little or no confidence in BRI, and 72 percent of those who view China as the most influential economic power are worried about its growing economic influence.134

BRI abets corruption and democratic backsliding in host countries.
 

Major infrastructure projects provide ample opportunities for corruption, and BRI’s practices magnify these opportunities. Opaque lending terms and contracts and closed bidding processes typify BRI projects. This secrecy and lack of accountability enables corrupt political elites to award contracts to their allies and divert funds toward their supporters. BRI does not include an anticorruption mechanism for monitoring projects, nor have Chinese companies cracked down on local partners for misusing funds. Chinese banks and companies often carry out BRI with domestic political actors they are most comfortable with, skirting democratic institutions and tying the fate of projects to the continued success of individual politicians and political parties.

BRI investment has often shored up authoritarian regimes when they are most vulnerable, providing financing they desperately need after countries cut off aid and financial ties in response to concerns about human rights abuses. As a result, the United States and like-minded countries lose leverage that they would have otherwise enjoyed to pressure these countries to improve their governance.

Malaysia’s experience highlights how BRI provides an opening for corruption and rent-seeking behavior. China embraced Malaysian Prime Minister Najib Razak and greenlit multiple megaprojects that were not economically feasible but could bolster Najib’s political standing. Najib diverted funds to greasing his patronage network and maintaining electoral support. When sovereign wealth fund 1Malaysia Development Berhad (1MDB), which Najib used as his personal slush fund, could not repay $13 billion it had borrowed, he approached China for a bailout. The sides agreed to $34 billion in new BRI projects despite conceding they lacked “strong project financials,” with the goal of inflating their price tag so that Chinese SOEs could assume 1MDB’s debts and use excess funds to pay down other 1MDB debts.135 Najib was voted out of office in large part because of these scandals, put on trial, and convicted on all counts. Jho Low, a major figure in the 1MDB scandal, is wanted by multiple countries but is reportedly living in China under the government’s protection.136

China’s willingness to support corrupt politicians, work around democratic institutions, and bail out countries that are committing human rights abuses is evident across BRI:

• In Kyrgyzstan, in one of BRI’s first projects, China EXIM lent $386 million to rebuild the power plant that provided nearly all of the capital’s heat and electricity. China’s embassy made clear that its preferred contractor had to be chosen for the project, and eventually $111 million was siphoned off, with the Chinese contractor purchasing fire extinguishers for $1,600 and pliers for $320.137 Following an investigation, dozens of officials, including a former Kyrgyz prime minister, were charged with corruption.
• Myanmar, shunned by the United States for committing genocide against its Rohingya minority, has embraced BRI for its financing needs, inking over three dozen deals with China.138
• Sri Lanka, largely avoided by investors because of human rights abuses during its civil war, turned to China for funding an array of projects. China worked closely with President Mahinda Rajapaksa, backing economically unfeasible megaprojects in his home district to boost his party’s electoral prospects. The Chinese SOE building the port at Hambantota funneled funds away from the project and directly to Rajapaksa’s election campaign.139
• In Pakistan, China invested heavily in its relationship with Prime Minister Nawaz Sharif and his Pakistan Muslim League-N party (see Pakistan Spotlight). It worked primarily with Sharif and his brother, Shabhaz Sharif, and many BRI projects disproportionately rewarded Sharif’s Punjab political base. In response to current Prime Minister Imran Khan’s publicly opposing much of BRI during his election campaign, China decided to go around Pakistan’s embattled democratic institutions and instead began working directly with the military on BRI.140

BRI has increased the supply of surveillance technology to autocratic and struggling democratic regimes.
 

Chinese firms, led by Huawei, are the world’s leading suppliers of AI surveillance technology used for public security.141 These “safe city” programs, as Huawei terms them, encompass everything from facial recognition technology to video surveillance systems. Because DSR projects tend to package technology in bundles, recipient states are more likely to purchase potentially worrisome technologies as part of a broader information, communications, and technology (ICT) buildout.142 The same technology that monitors traffic flows and assigns parking tickets is also used for the digital surveillance of citizens, for example. Chinese firms are hardly the only surveillance technology providers: many companies headquartered in liberal democracies are both offering similar products or enabling Chinese companies to field their technologies.143 However, Chinese firms are the primary suppliers in twenty-four countries; of these, fourteen are BRI participants. Although 44.1 percent of BRI countries have acquired AI surveillance technology from Chinese companies, only 26.4 percent of non-BRI countries have done the same.144 Nonliberal regimes are also much more likely to sign safe city agreements with Huawei.145

DSR makes it easier for countries to acquire surveillance technology, providing authoritarian states with greater capabilities to entrench themselves and monitor their populations. Huawei employees aided Uganda’s president, who has ruled the country for over three decades, in spying on his political opponents, intercepting their encrypted communications, and tracking their movements. In Zambia, another BRI country, Huawei employees accessed the phones and social media pages of opposition figures at the behest of the Zambian government, leading to concerns of democratic backsliding.146 In both instances, the Chinese equipment that underpins such surveillance was provided as part of DSR.147 Through DSR, Chinese companies have also undertaken safe city projects in Kenya and Uganda and provided mass surveillance facial recognition technology to Zimbabwe, making political repression more effective.148 Beijing provides government-to-government training programs for DSR states, which could help them improve intelligence collection against and monitoring of their own citizens.149 China could also help countries better control their internet services and monitor their citizens’ social media activity.

Surveillance technology exports through DSR will not turn a democratic country into an authoritarian one, but they could be used to cement authoritarian control where it already exists or abet a mixed regime’s backsliding. Furthermore, the relative growth of China’s smart cities offerings and dearth of alternatives means that the Chinese supply will likely only increase over time in relative terms.150

• 124<p>Demetri Sevastopulo, Jim Brunsden, Sam Fleming, and Michael Peel, “<a href="http://ft.com/content/2f0212ab-7e69-4de0-8870-89dd0d414306">Biden team voices concern over EU-China investment deal</a>,” <em>Financial Times</em>, December 22, 2020, quoting incoming National Security Adviser Jake Sullivan that the new administration would “welcome early consultations with our European partners on our common concerns about China’s economic practices;” “<a href="https://www.bloomberg.com/news/articles/2021-01-08/europe-s-contested-deal-with-china-sends-warning-to-joe-biden">Europe’s Contested Deal With China Sends Warning to Joe Biden</a>,” Bloomberg News, January 6, 2021. </p>
• 125Eric Reguly “<a href="https://www.theglobeandmail.com/business/commentary/article-europe-hands-china-a-symbolic-and-strategic-victory-as-beijing-cracks/">Europe Hands China a Symbolic and Strategic Victory as Beijing Cracks Down on Democracy</a>,” January 8, 2021, <em>Globe and Mail</em>; Theresa Fallon, “<a href="https://thediplomat.com/2021/01/the-strategic-implications-of-the-china-eu-investment-deal/">The Strategic Implications of the China-EU Investment Deal</a>,” <em>Diplomat</em>, January 4, 2021. The CAI will require approval of the European Parliament, with some parliamentarians expressing concern in light of Beijing’s mass arrest of pro-democracy politicians in Hong Kong on January 6, 2021. Stuart Lau, “<a href="https://www.scmp.com/news/china/diplomacy/article/3116713/european-parliament-members-say-hong-kong-arrests-threaten">Hong Kong arrests threaten passage of EU-China investment deal, European Parliament members say</a>,” <em>South China Morning Post</em>, January 7, 2021.
• 126Xinhua, “<a href="http://www.xinhuanet.com/english/2019-04/27/c_138016073.htm">Joint Communique of the Leaders’ Roundtable of the 2nd Belt and Road Forum for International Cooperation</a>,” Xinhua, April 27, 2019.
• 127Antonio Guterres, “<a href="https://www.un.org/sg/en/content/sg/speeches/2017-05-14/secretary-general%E2%80%99s-belt-and-road-forum-remarks">Remarks at the Opening of the Belt and Road Forum</a>,” United Nations, May 14, 2017.
• 128Nadège Rolland, <a href="https://www.nbr.org/publication/chinas-eurasian-century-political-and-strategic-implications-of-the-belt-and-road-initiative/"><em>China’s Eurasian Century?</em></a> (Washington, DC: National Bureau of Asia Research, 2017), 91.
• 129Tang Siew Mun, Hoang Thi Ha, Anuthida Saelaow Qian, Glenn Ong, and Pham Thi Phuong Thao, <a href="https://www.iseas.edu.sg/home-page-highlights/state-of-southeast-asia-2020-survey-report/"><em>The State of Southeast Asia: 2020 Survey Report</em></a> (ISEAS-Yusof Ishak Institute, January 16, 2020).
• 130

  Mun, Ha, Qian, Ong, and Thao, The State of Southeast Asia: 2020 Survey Report.

• 131For FDI figures, see United Nations Conference on Trade and Development (UNCTAD), <a href="https://unctad.org/webflyer/world-investment-report-2020"><em>World Investment Report 2020: International Production Beyond the Pandemic</em></a> (New York, NY: UN, 2020).
• 132Mogopodi Lekorwe, Anyway Chingwete, Mina Okuru, and Romaric Samson, <a href="https://www.afrobarometer.org/publications/ad122-chinas-growing-presence-africa-wins-largely-positive-popular-reviews"><em>China’s Growing Presence in Africa Wins Largely Positive Popular Reviews</em></a>, Dispatch No. 122 (Afrobarometer, October 24, 2016).
• 133Shihar Aneez, “<a href="http://reuters.com/article/us-sri-lanka-chinainsight/chinas-silk-road-push-stirs-resentment-and-protest-in-sri-lankaidUSKBN15G5UT">China’s ‘Silk Road’ Push Stirs Up Resentment and Protest in Sri Lanka</a>,” Reuters, February 1, 2017; Sun Narin, “<a href="http://voacambodia.com/a/our-ancestors-graves-have-been-drowned-cambodian-damwipes-out-hill-tribe-way-of-life/4689817.html">‘Our Ancestors’ Graves Have Been Drowned’: Cambodian Dam Wipes Out Hill Tribe Way of Life</a>,” <em>VOA Khmer</em>, December 7, 2018.
• 134

  Mun, Ha, Qian, Ong, and Thao, The State of Southeast Asia: 2020 Survey Report.

• 135Tom Wright and Bradley Hope, “<a href="http://wsj. com/articles/how-china-flexes-its-political-muscle-to-expand-power-overseas11546890449">WSJ Investigation: China Offered to Bail Out Troubled Malaysian Fund in Return for Deals</a>,” <em>Wall Street Journal</em>, January 7, 2019.
• 136Bradley Hope, Tom Wright, and Scott Patterson, “<a href="https://www.wsj.com/articles/malaysia-says-china-harbors-1mdb-fugitive-1534459559">1MDB Fugitive Jho Low Harbored by China, Malaysia Says</a>,” <em>Wall Street Journal</em>, August 17, 2018.
• 137Elnura Alkanova, “<a href="https://www.opendemocracy.net/en/odr/what-happened-at-bishkek-power-plant/">Abuse of Power? On the Trail of China’s Mystery Millions in Kyrgyzstan</a>,” <em>Open Democracy</em>, October 24, 2018; Andrew Higgins, “<a href="http://nytimes.com/2019/07/06/world/asia/china-russia-central-asia.html">A Power Plant Fiasco Highlights China’s Growing Clout in Central Asia</a>,” <em>New York Times</em>, July 6, 2019.
• 138John Reed, “<a href="http://ft.com/content/a5265114-39d1-11ea-a01a-bae547046735">China and Myanmar Sign Off on Belt and Road Projects</a>,” <em>Financial Times</em>, January 18, 2020.
• 139Maria Abi-Habib, “<a href="http://nytimes.com/2018/06/25/world/asia/china-sri-lanka-port.html">How China Got Sri Lanka to Cough Up a Port,</a>” <em>New York Times</em>, June 25, 2018.
• 140Andrew Small, <a href="https://www.gmfus.org/publications/returning-shadows-china-pakistan-and-fate-cpec"><em>Returning to the Shadows: China, Pakistan, and the Fate of CPEC</em></a> (German Marshall Fund of the United States, September 2020).
• 141Steven Feldstein, “<a href="https://warontherocks.com/2020/02/when-it-comes-to-digital-authoritarianism-china-is-a-challenge-but-not-the-only-challenge/">When It Comes to Digital Authoritarianism, China Is a Challenge— But Not the Only Challenge</a>,” <em>War on the Rocks</em>, February 12, 2020.
• 142John Hemmings, “<a href="https://www.nbr.org/publication/reconstructing-order-the-geopolitical-risks-in-chinas-digital-silk-road/">Reconstructing Order: The Geopolitical Risks in China’s Digital Silk Road</a>,” <em>Asia Policy</em> 15, no. 1 (January 2020), 7.
• 143Steven Feldstein, “<a href="https://www.uscc.gov/hearings/chinas-strategic-aims-africa">Testimony Before the U.S.-China Economic and Security Review Commission: Hearing on China's Strategic Aims in Africa</a>,” May 8, 2020; and Liza Lin and Josh Chin, “<a href="http://wsj.com/articles/u-s-tech-companies-prop-up-chinasvast-surveillance-network-11574786846">U.S. Tech Companies Prop Up China’s Vast Surveillance Network</a>,” <em>Wall Street Journal</em>, November 26, 2019.
• 144Steven Feldstein, <a href="https://carnegieendowment.org/2019/09/17/global-expansion-of-ai-surveillance-pub-79847"><em>The Global Expansion of AI Surveillance</em></a> (Washington, DC: Carnegie Endowment for International Peace, September 2019).
• 145Jonathan E. Hillman and Maesea McCalpin, “<a href="http://csis.org/analysis/watching-huaweis-safe-cities">Watching Huawei’s ‘Safe Cities</a>,’” Center for Strategic and International Studies, November 4, 2019.
• 146Joe Parkinson, Nicholas Bariyo, and Josh Chin, “<a href="https://www.wsj.com/articles/huawei-technicians-helped-african-governments-spy-on-political-opponents-11565793017">Huawei Technicians Helped African Governments Spy on Political Opponents</a>,” <em>Wall Street Journal</em>, August 15, 2019; Sheridan Prasso, “<a href="https://www.bloomberg.com/news/features/2019-01-10/china-s-digital-silk-road-is-looking-more-like-an-iron-curtain">China’s Digital Silk Road Is Looking More Like an Iron Curtain</a>,” Bloomberg, January 10, 2019.
• 147Prasso, “China’s Digital Silk Road Is Looking More Like an Iron Curtain.”
• 148Feldstein, “Testimony Before the U.S.-China Economic and Security Review Commission: Hearing on China’s Strategic Aims in Africa.”
• 149He Huifeng, “<a href="https://www.scmp.com/news/china/economy/article/2155203/remote-corner-china-beijing-trying-export-its-model-training">In a Remote Corner of China, Beijing Is Trying to Export Its Model by Training Foreign Officials the Chinese Way</a>,” <em>South China Morning Post</em>, July 14, 2018.
• 150“<a href="http://www1.hkexnews.hk/app/appyearlyindex.html?lang=en&board=mainBoard&amp; year=2019">Application Proof of Megvii Technology Limited</a>,” <em>HKEX News</em>, August 25, 2019.

BRI is likely to remain a major source of growing global carbon emissions and lock countries in to high-carbon infrastructure.
 

Most BRI projects to date have focused on the transportation and energy sectors because of China’s excess capacity in these areas and demand from BRI countries. Through BRI, China is offering both the technology and the financing to build power plants, in most cases proceeding with coal-fired power plants despite Chinese expertise in renewable energy. BRI countries frequently request coal-fired power for several reasons. Many government officials are more familiar with coal-fired power, and their domestic energy policies often explicitly call for it. Coal is also perceived to be cheaper, more reliable (particularly for large baseload power), and easier for older grid systems to absorb.

China is willing to respond to this demand. BRI countries know that if they want coal-fired power, China is the leading, and increasingly the only, source for financing coal-fired power plants. Under the Barack Obama administration, the United States restricted its government financing for new coal-fired plants overseas and worked to block similar funding by the World Bank, which formally tightened its policy in 2018 to severely restrict such financing. The Asian Development Bank has not funded any coal-fired power plants since 2013, and the China-led Asian Infrastructure Investment Bank (AIIB) also placed some limits on coal-fired power financing. In 2020, Japan and Korea, the second- and third-largest investors in coal-fired power after China, both announced they would no longer finance overseas coal power. In light of the cutbacks by the MDBs and other major investors, Chinese banks are the world’s largest source of financing for coal-fired power plants.

As a result, more than 60 percent of China’s BRI-specific energy financing from CDB and China EXIM has gone toward nonrenewable energy resources. Between 2014 and 2017, 91 percent of energy-sector syndicated loans from six major Chinese banks to BRI countries were in fossil fuels, with 40 percent of BRI lending for the power sector in 2018 going to coal projects (see figure 8). Although China has become the world’s leading producer and user of renewable energy, it is now involved in as many as 240 coal-fired power plant projects across twenty-five BRI countries, including more than a dozen in Bangladesh alone. In EU enlargement countries Bosnia and Herzegovina and Serbia, China has built and is building coal-fired power plants that do not meet EU environmental standards, including one that is Europe’s largest sulphur dioxide polluter. At least six additional MOUs between Chinese companies and southeast European governments stipulate building more coal-fired plants.

Building these coal-fired plants has allowed China to find work for its laborers and transfer its oldest and dirtiest plants out of the country after the enactment of regulations and taxes on carbon emissions within China. Cambodia was the recipient of one such coal-fired power plant that was completely disassembled in China and then reassembled by Chinese workers in Cambodia. For the past nine years, China’s coal consumption has been greater than the rest of the world combined, but it still mines more coal than it needs, and BRI helps its SOEs establish new markets for Chinese coal abroad. At least thirteen BRI countries experienced double-digit growth in CO2 emissions in the initiative’s earliest years, and these increases beset countries that are already among the most affected by climate change, including Bangladesh, Myanmar, Pakistan, and Vietnam.

A continued failure to reorient BRI toward low-carbon options could lead to “carbon lock-in” in recipient countries’ economies because of the long-lived nature of the projects. Because each new coal-fired power plant is likely to last thirty-five years or more, such production commits many BRI countries to continued dependency on carbon-intensive power production. Although the COVID-19 pandemic could force China to shift away from expensive energy projects, demand from developing countries is likely to remain strong as they seek interim strategies to rehabilitate their economies and promote growth. The fossil fuel energy projects undertaken through BRI will make it harder and more expensive for countries to scale down production in the long term, fixing the emissions rates of host countries at dangerously high levels and making it more difficult to respond to climate change.

BRI projects threaten biodiversity, forests, and water resources.
 

Preserving critical habitats and national protected areas is not a major variable affecting China’s overseas lending decisions. One database that tracks loans extended by CDB and China EXIM found they have funded 261 projects located in critical habitats and 124 projects in nationally protected areas. BRI exhibits this pattern of largely setting environmental considerations aside. Many BRI projects, particularly those in the transportation and energy sectors, traverse environmentally sensitive areas, including protected areas and important spaces for biodiversity and birdlife.

A report commissioned by Cambodia’s government concluded that a hydropower dam being built as part of BRI was located at the “worst possible place,” would do “devastating” harm to fisheries, and had the potential to “literally kill” the Mekong River. Because many of the BRI corridors pass through steep terrain that is vulnerable to erosion, soil degradation, and sedimentation, the direct effects on the land, ecosystems, and wildlife could be elevated. Poorly constructed roads can cause increased sedimentation in rivers and raise the risk of flooding. In Myanmar, for example, twenty-five million people live downslope from two proposed BRI road projects at risk of flooding.

Further, the high-speed rail that makes up much of BRI’s rail program requires straight lines that cannot be quickly routed around natural barriers, rivers, or lakes. Virtually all railroad and road construction results in some degree of habitat destruction, particularly if traversing a tropical forest. Roads and railroads also fragment the habitat of wildlife, potentially creating barriers to migration. Moreover, the increased connectivity and the creation of new travel routes significantly raise the risk of the introduction of invasive species that could wreak havoc on native ecosystems.

The development that accompanies BRI projects is likely to set in motion further unintended consequences as people move and markets shift in response to changes in transportation costs, which can open previously unoccupied land to settlements, resulting in habitat loss and deforestation. Although sound environmental assessments and a commitment to modifications to address environmental harm could mitigate many of these harmful outcomes, BRI projects often proceed without environmental impact assessments or mitigation efforts.

China’s dam projects along the Mekong River showcase the need for careful environmental assessments and coordination with its BRI partners. All five countries in the Lower Mekong region—Cambodia, Laos, Myanmar, Thailand, and Vietnam—have officially endorsed BRI, which includes an effort to improve connectivity between China’s southern provinces and Southeast Asia by building bridges and dams along the Mekong River and its tributaries.

For its part, China operates eleven of the world’s largest dams on the river, allowing Beijing to store more than forty-seven billion cubic meters of water and generate 21,310 megawatts of electricity. But those dams, and China’s refusal to join the regional group designed to coordinate policies affecting the river’s health, the Mekong River Commission, have raised fears that Beijing could one day coercively restrict or shut off the water flow. And in 2019, China held back so much water from the river that it led to devastating shortages in Cambodia, Laos, and Thailand. The downstream countries experienced a shortfall so severe that it resulted in the lowest water levels ever recorded in Thailand and left some riverbeds dried up entirely.

The devastation caused by the low water levels in the spring of 2020 led some critics to contend that even the release of water has become political and something for which China seeks gratitude, with others claiming that China is guarding against climate change‒induced loss of water by building massive water storage capacity behind its Mekong dams. Even Cambodia’s Prime Minister Hun Sen, one of China’s staunchest allies and a major BRI supporter, was so concerned by the lack of water in the Mekong that Cambodia postponed until 2030 any further action on its two planned dams.

China’s pivot to an “open, green, and clean” BRI has few tangible results.
 

In response to international pressure, Beijing has endeavored to rebrand BRI as a green initiative, but its efforts have been underwhelming. This is largely because China’s new guidelines are purely voluntary and it has been unwilling to impose environmental standards on host nations, requiring instead that BRI projects meet local environmental standards, no matter how low those standards are. The most effective greening initiatives to date could be the adoption of Green Investment Principles (GIP) for Belt and Road Development and the establishment of a BRI International Green Development Coalition (BRIGC).

The GIP are the result of a joint exercise by the City of London Corporation’s Green Finance Initiative and China’s Green Finance Committee, drafted by representatives from the World Economic Forum, UN Principles for Responsible Investment, Belt and Road Bankers Roundtable, and the Paulson Institute. They aim to create common standards for what constitutes a green project and to embed principles of sustainable development across all types of financing and all phases of a BRI project, along with requiring financial institutions to conduct environmental impact assessments for their BRI investments. If adhered to, the GIP would do much to stop the problem of “greenwashing” that plagues investments from around the world, by prohibiting using in-name-only “green bonds” to finance the replacement of small, inefficient coal plants with larger, more efficient but fundamentally high-carbon facilities and other only marginally green projects.

The fundamental problem with China’s efforts to make BRI more environmentally sustainable is that these principles remain voluntary, and though a number of Chinese and European banks have signed on, few developing country institutions have joined the initiative. Yet green finance remains an area where China has shown a stronger commitment and ability to influence the direction of BRI investments.

The BRIGC also shows significant promise in that it creates an international network of environmental ministries, nongovernmental organizations (NGOs), researchers, and international agencies working to promote the UN’s sustainable development and environment goals along BRI. The UN Environment Program and the Chinese Ministry of Ecology and the Environment run the coalition, which includes participation from environment ministries in twenty-six BRI countries and 120 organizations, including the World Wildlife Fund, Client Earth, and the World Resources Institute. Work is underway for two-year and five-year plans, for draft guidelines for all BRI projects, and for the launch of pilot projects in the near term. It is not clear, however, whether the coalition can overcome strong differences among its members or address the fundamental problem that the only required compliance for BRI projects is with a host country’s environmental regulations.

BRI port projects have significant strategic implications for the United States but are unlikely to become a network of Chinese military bases anytime soon.
 

Within the First Island Chain in the western Pacific, China’s maritime ambitions include asserting its sovereignty over disputed features and territories and establishing regional preeminence; beyond the region, its aims are currently more modest and include access to ports, influence in other countries, and protecting its overseas interests, including access to critical supplies. As the world’s largest energy importer, China worries that in the event of a conflict with the United States, U.S. forces could blockade the straits of Malacca, cutting off the vast majority of China’s energy supply. Beijing’s push to secure sea lines of communication by building and gaining access to ports along the Maritime Silk Road can be understood as an attempt in part to address its “Malacca Dilemma.” A functioning port at Gwadar, and a pipeline connecting it to China, would theoretically allow China to bypass the straits of Malacca and help relieve this dilemma.

Beijing worries that it lacks the access arrangements necessary to protect its substantial overseas interests, with its national defense white paper noting “deficiencies in overseas operations and support.” To remedy this shortcoming, Chinese military strategists have argued the country should acquire “overseas strategic strongpoints” in the Pacific and Indian Oceans, and BRI’s path includes these strongpoints. China has no formal military alliances and currently has only one small overseas military base in Djibouti, used primarily to support counterpiracy and peacekeeping operations. China is also reported to be building two new naval piers in Cambodia as part of a broader agreement giving China exclusive rights to a Cambodian naval station.

China does not appear to be seeking a U.S.-style network of overseas bases and access agreements, nor does it yet have in place the operational concepts and organization to sustain large overseas military operations. Instead, the People’s Liberation Army (PLA) could rely on access to a variety of commercial port facilities to support its operations and logistics overseas. Chinese firms own, partially own, or operate at least ninety-three ports across the globe. Firms with close ties to the CCP own and operate many of these ports, which are concentrated near maritime chokepoints and critical sea lines of communication. BRI is a tool to expand this influence. Under the auspices of BRI, Chinese banks have financed numerous ports around the world, while Chinese firms have retained ownership stakes in these ports.

By financing, constructing, and operating this vast network of overseas ports, China has gained varying degrees of control over major maritime commercial facilities, and Beijing recognizes the value of these facilities. According to a former Sri Lankan foreign secretary, for example, China made clear during negotiations concerning the Hambantota port that intelligence sharing would be a part of the deal. Chinese military strategists acknowledge, however, numerous hurdles to using commercial facilities to sustain major military operations. In some cases, if Beijing sought to project military power outside East Asia, it would need to recast existing ports to accommodate major warships and related maintenance and logistic activity.

In other instances, the PLA Navy (PLAN) would have few obstacles to overcome. Although Gwadar is not a PLA base and the PLAN has yet to make a port call at the facility, the Pakistan Navy operates Chinese-built ships out of the port, and thus it would not be difficult for the PLAN to use the same facilities and parts to sustain operations. Gwadar also has the ability to host the PLAN’s largest vessels, and the port’s lack of commercial activity and isolation make it a more desirable place from which to conduct military operations. Accordingly, U.S. planners should remain attuned to the possibility that China could pursue a network of overseas bases, including at Gwadar, which offers a compelling logistics hub for the PLAN. But such a shift is unlikely to emerge in the near future, and should it occur, the United States would have significant warning time in which to respond. Until China secures true base access, its ability to use commercial ports in wartime is limited.

Nevertheless, China’s port control could have major strategic implications for host nations and for the United States. If the host is a U.S. treaty ally, its self-defense or wider regional contingencies could rely on the United States’ ability to flow logistics in crisis or conflict. If that port is owned or operated by a Chinese entity with close ties to the government, Beijing could apply pressure, preventing or delaying the host country’s reception of military logistics and supplies necessary for defense.

For example, COSCO, a Chinese SOE formerly controlled by China’s Ministry of Transport, holds a majority stake in the port authority at Piraeus, Greece, and operates the entire port. A decision to close the port to U.S. forces could impair U.S. and North Atlantic Treaty Organization (NATO) operations against Russia. A similar risk is present in Haifa, Israel, where a Chinese company is poised to operate the port for the next twenty-five years. Such an outcome could have consequences for operations throughout the Eastern Mediterranean and Levant. Even without China’s being able to use commercial ports as bases, Beijing could still deny the U.S. military the ability to use them. Such actions would substantially affect prospective U.S. operations in Asia, Europe, and the Middle East.

The COVID-19 pandemic is unlikely to change Beijing’s maritime ambitions. In the short term, China’s shipbuilding industry took a hit as a result of quarantines and stay-at-home orders, affecting completion deadlines. PLA recruitment was temporarily halted, exacerbating a shortage of naval aviation pilots. These delays have compounded ongoing limitations within the PLAN, including a lack of basic logistic and sustainment capabilities necessary for blue water operations.

Despite these setbacks, China’s strategic interest in port access abroad is likely to remain high. Locally, BRI port projects could be less likely to be canceled than other transportation projects, as they are often established through subnational authorities where local sentiments could be more eager to see the project to completion. Acute debt crises could lead BRI port hosts to lease back port stakes or assets to China as they search for relief, which would increase China’s levers of control over these vital nodes.

China’s port projects also have significant nonmilitary implications.
 

Less analyzed and understood are the nonmilitary advantages China could reap from its port projects. Companies closely tied to the Chinese government finance, construct, and operate overseas ports as part of BRI. Port financing could allow Chinese companies to win political advantages, reward supporters, or access resources in host countries. Port construction presents companies with intelligence collection possibilities, whereas operating the ports presents much greater intelligence-gathering opportunities with less chance of detection. Operating ports also could allow China to manipulate trade flows as a form of financial sanctions or to deny foreign actors’ access to ports.

China’s port projects also give Beijing the opportunity to build commercial relationships with the host country and extend political goodwill:

• In some cases, China could gain an advantageous strategic position: better access to sea lines of communication; the prospective opportunity to improve its power position relative to a rival; or proximity to chokepoints that could help guarantee its energy security and freedom of action in crisis or conflict.
• It could gain the ability to control foreign access to ports, put dual-use facilities toward military purposes, and access commercial or financial data that is politically, economically, or militarily useful.
• Finally, it could acquire particular intelligence benefits if a port lies on a Chinese or foreign-built undersea cable terminal or near a U.S. military facility (see figure 9).

The potential implications of Chinese ports for U.S. interests vary considerably depending on the form and extent of Chinese stakes in the ports, political circumstances of the host country, proximity to U.S. military facilities, and other factors (see figure 10). The United States should assume that a major port project will give China greater political and economic leverage with the host country. This risk would be even greater if the country is already indebted to China and more politically consequential if that country is a U.S. ally. In cases where a Chinese firm owns and operates the entire port (rather than just a single terminal) and has close ties to the Chinese government, and the host country is economically dependent on China, the United States could be especially likely to have its own military access denied in a period of heightened tensions.

The United States should also assume that China could eventually utilize a port facility for dual-use or military purposes to sustain military operations of its own. This would, in turn, limit U.S. military freedom of action in the surrounding area. China could use ports to collect commercial data, while in other cases it could reap military intelligence benefits. Opportunities for consequential intelligence collection are higher at ports that serve as terminuses for undersea cable communications systems, and are likely to be especially high at port facilities operated by China that serve as terminals for Chinese-built undersea cable systems.

China’s supply of energy technologies and its push for global energy interconnection give it potential control over vital infrastructure in BRI countries.
 

Xi Jinping is pursuing a vision of interconnectivity for power plants, transmission, and grid infrastructure, describing BRI’s energy projects as increasing “mutual trust in politics and creat[ing] a new pattern of energy security featuring co-cooperation, mutual benefit and win-win results.” China’s Global Energy Interconnection Development and Cooperation Organization (GEIDCO), an international organization made up of energy and construction companies, equipment manufacturers, financial institutions, research universities, and NGOs, in conjunction with the State Grid Corporation of China (SGCC), estimates that Beijing’s total investment in power sources and grids in BRI countries will reach $27 trillion by 2050.

With the help of Chinese financing, SGCC has already built grids that connect China to Laos, Mongolia, Myanmar, and Russia while investing in grid operations in Brazil, Italy, the Philippines, and Portugal. China has built a combination of coal-fired, renewable (largely wind and hydropower), and nuclear power plants throughout Southeast Asia and Africa, in addition to energy facilities in Europe and Latin America, with estimates that nearly two-thirds of Chinese spending on completed BRI projects went into the energy sector. Beijing’s plan is to use the size and strength of SGCC, now the third-largest company in the world, to build out and then connect power grids, with a network of transmission and distribution grids connecting large energy bases under a smart, comprehensive platform that allocates energy and resources throughout the network.

In recognition of the fact that connecting power grids across international boundaries requires some form of supranational governance, in 2016 China’s SGCC set up GEIDCO to promote global energy interconnection. The UN Framework Convention on Climate Change embraced GEIDCO as an NGO partner, with officials from the UN and World Bank noting its potential to address problems of power shortages, poverty, and climate change. As a recent report noted, however, “The line is thin between GEIDCO’s mission to ‘serve the sustainable development of humanity’ and its role in laying the groundwork for huge SGCC contracts and Chinese-led infrastructure build.”

Although the construction of modern renewable power plants, coupled with the development of smart power grids, holds great promise for more efficient, sustainable energy markets, China’s emergence as the leader in certain power technologies raises security concerns. The power grid interconnections rely on supervisory control and data acquisition systems running on communications and technology networks built by SGCC and other state-owned entities, giving China intelligence-gathering opportunities and the potential ability to manipulate or deny power to other countries. SGCC’s Chairman Liu Zhenya referred to global energy interconnectivity as “the ICBM of the power industry.”

Because power grids constitute critical infrastructure, they are common targets for cyberattacks. Countries’ abilities to fend off such attacks could rest in China’s hands rather than their own if their power sources or power grids are partially or fully owned by Chinese SOEs. Chinese companies could also take outright control of power grids in BRI countries. Heavily indebted Laos, struggling to make debt payments to China in the face of the COVID-19 pandemic, ceded majority control of its electric grid to a Chinese state-owned company, and others could follow. All of this makes it more likely that China, through its ability to control power grids in BRI countries, will gain the ability to push its policy preferences on these countries.

BRI enables Chinese technology companies to penetrate and dominate markets.
 

Announced in 2015, the Digital Silk Road is a more focused undertaking than BRI writ large. A handful of China’s national champions—Huawei, ZTE, China Mobile, China Telecom, Alibaba, Tencent, Baidu, and JD, as well as a few others—are encouraged to build out digital infrastructure in BRI countries, with less overlap and a clearer division of labor. China’s Ministry of Industry and Information Technology has provided clear direction to these companies, identifying six core areas for DSR: 5G technology, smart cities, utilization of the Beidou satellite system, communication infrastructure, network connectivity, and telecommunications services.

Under DSR, indigenous Chinese ICT firms receive state backing that gives them three sets of advantages:

• First, companies such as Huawei, Hikvision, and ZTE gain preferential government treatment through policy support and major lines of credit through CDB, China EXIM, and state-owned commercial banks. This in turn allows them to sell their products 30 to 40 percent more cheaply than non-Chinese competitors.
• Second, Beijing also extends credit to specific DSR projects and countries to allow them to make major purchases from Chinese companies. For example, China EXIM financed 85 percent of the China-Pakistan Fiber-Optic Project and loaned to Nigeria the full cost of a Huawei-built 5G network.
• Third, policy backing and pricing advantages allow Chinese companies to receive preferential terms when they negotiate deals with local governments.

For a technology company such as Huawei, moving into a new market can be expensive—a problem alleviated by government subsidies that make Huawei’s products significantly cheaper than its competitors and Chinese financing to Huawei’s customers that enables them to purchase these already cheaper products at lower interest rates with more generous grace periods. Once Huawei is in place, it is relatively cheaper for additional Chinese companies to follow it into that market or for Huawei to gain a foothold in adjacent markets.

China often offers BRI countries complete technology packages, including cloud services, mobile payments, smart cities, and social media applications from a combination of Chinese companies. Once these technology suites are embedded, switching to non-Chinese providers becomes far less likely and more costly for local operators, especially because telecommunications companies generally cannot mix and match components—using Huawei equipment alongside Ericsson or Nokia, for example. Moreover, if Huawei builds the entire 5G network for a given DSR country and its neighbors, this raises the chances that it will be chosen to upgrade those systems when newer technologies become available. Huawei has already finalized more 5G contracts than any other telecom company, half of which are for 5G networks in Europe (see figure 11). In Africa, Huawei has built 70 percent of the fourth-generation (4G) networks on the continent and has signed the only formal agreement on 5G on the continent.

In all, Huawei has shipped seventy thousand 5G base stations globally. The export of Huawei telecom equipment along the DSR has also enabled the company’s share of global telecom equipment to increase by 40 percent in the years since BRI was rolled out. China’s Belt and Road Portal reports DSR has enabled six thousand Chinese internet companies and more than ten thousand Chinese technology products to enter foreign markets.

Huawei’s penetration of BRI countries is concerning for the United States, which assesses that the company is effectively an extension of the CCP. Under China’s 2017 National Intelligence Law, Huawei, like all Chinese technology companies, is legally required to conduct intelligence work on behalf of the Chinese government. According to this analysis, the Chinese government has the ability to use Huawei-built 5G networks to collect intelligence, monitor critics, steal intellectual property, and disable networks.

DSR provides additional backing to Chinese companies to build foreign digital ecosystems. Alibaba, the Chinese e-commerce giant, has come to dominate e-commerce in Malaysia, for example, and its affiliate Ant Financial has subsequently established cooperation agreements with Malaysian banks, leading to much stronger bilateral commercial and financial ties. Malaysia is an outlier in the extent of its embrace of Chinese e-commerce, but the Chinese government has also begun a push to export data centers, including through ASEAN, which could make members depend more on China for data storage, analysis, and exploitation.

Through DSR, China uses the initial sales of digital infrastructure to set accompanying standards. The success of Chinese companies such as Huawei and ZTE in building 5G networks and setting standards for these networks in Africa and parts of Asia is making it difficult for Western companies to sell similar technologies in these regions. The concern for non-Chinese firms is China’s ability to use initial sales, along with service and maintenance contracts—and any accompanying standards—to lock in market share for Chinese companies, particularly in those sectors where switching to a different provider is difficult and expensive.

BRI will give China additional tools to exploit mass quantities of data.
 

By providing Chinese companies with massive amounts of data, DSR will enhance China’s global collection capabilities. This is all the more true because DSR helps Chinese companies export new technologies in bundles, such as smart cities, smart ports, and 5G-based AI and data analytics products that travel together. Chinese companies sell smart ports, for example, which are intended to create efficiencies in unloading and productivity using sensors and automated functions, rather than simply constructing the port or offering discrete products to service it. But technological bundling also allows for massive data processing and extraction. 5G technology allows for data collection and centralization, while AI allows for its processing and exploitation.

Historically, the United States has itself pressed U.S. telecommunications companies to gain intelligence advantages, within legal bounds and not for commercial advantage. Whether because of SOEs’ roles in building global digital infrastructure or because of enduring fears that the Chinese government can access data held by private firms, China’s digital footprint has radically transformed its own ability to collect, process, and exploit the data of DSR countries and their neighbors. This data is likely to be primarily commercial and financial, and its quality is unknown. But even financial data can be used to political effect, and some Chinese projects are highly sensitive, such as the building of undersea cables.

China could use the data extracted for the gain of Chinese firms or to hinder market access for foreign companies; to coerce or manipulate political elites abroad; or to spy on foreign governments or military facilities, including on U.S. allies or near U.S. bases. Furthermore, the massive quantities of data accrued from China’s control over internet networks will put the country in a position to conduct espionage more effectively and even to improve its offensive cyber operations.

China uses BRI to establish its preferred technical standards, including those for 5G networks.
 

Technical standards—that is, the regulations and protocols that govern using a repeatable technical task—can be set through two routes. One is through global standards bodies, such as the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC), and the International Telecommunications Union (ITU), in which China is among the best-represented members. The other is through market volume; by dominating a market, China could implicitly win support for its preferred standards across a range of technologies, including 5G and AI.

China’s Action Plan for Standards Connectivity for the Joint Construction of the Belt and Road calls for uniform technical standards across BRI. At the 2017 Belt and Road Forum, China signed agreements on mutual standard recognition with twelve countries, including Cambodia, Greece, Malaysia, Russia, and Switzerland. As of 2019, eighty-five such agreements had been signed with forty-nine countries and regions. By incorporating technical standards into BRI-related MOUs, China could win support for its preferred standards through project negotiations, as well as gain the political support of DSR countries in standard-setting bodies.

For example, China is well positioned to influence standards for 5G technology, which promises data speeds twenty times faster than current telecom networks, and on which so many other technologies will depend. The ITU, including its secretary-general, is populated by current and former Chinese telecom officials. Senior Chinese officials have made clear that they expect Chinese nationals serving at the ITU to push China’s preferred standards and promote the adoption of Huawei technology. Huawei receives substantial government support for these efforts and currently has a team of four hundred employees working full time on standardization contributions.

China submitted more technical documents related to wired communication specifications to the ITU in 2019 than any other country, and its companies have already gained 10 percent of the 1,450 essential patents for 5G standards (in comparison, 46.1 percent are held by U.S. companies). Huawei alone has filed 19,473 technical contributions to 5G standard setting, whereas Qualcomm—the largest U.S. contributor—has filed only 1,994.

DSR will not, however, ineluctably promote Chinese technical standards. Where a given project involves partnership between a Chinese company and a European one, for example, or if a Chinese firm builds only a small part of a larger network, the international standard could well prevail. But where DSR contracts are awarded exclusively to Chinese firms, as is true in most cases, Chinese technical standards will likely prevail. China has begun to promote its preferred standards in a variety of industries, including, but not limited to, new technologies, through BRI.

China is rebranding BRI for the global health crisis.
 

Early in the COVID-19 pandemic, the Chinese government resurrected a mothballed Health Silk Road moniker designed to rhetorically extend BRI to encompass China’s vision of global health governance. The concept dates back to a 2015 Chinese health official’s proposal to enhance international health cooperation under BRI’s “people-to-people exchange” component. Then, in January 2017, Xi Jinping visited the World Health Organization (WHO) in Geneva, where an official BRI MOU was signed supporting a Health Silk Road to establish a system to contain disease outbreaks, achieve a “community of common health for mankind,” and improve public health outcomes in BRI countries.

Chinese officials have continued to invoke the HSR as Beijing has sought to build a positive diplomatic narrative around its sale and donation of medical supplies to COVID-19–stricken countries and receive recognition as a leader in global health. In May, Xi addressed the World Health Assembly and announced a series of Chinese measures to address the pandemic, starting with $2 billion in aid to hard-hit countries. China’s plans also include the establishment of a response hub in China in conjunction with the WHO, a cooperative arrangement pairing African and Chinese hospitals, and pledges to ensure that any vaccine developed would be treated as a “global public product.” The HSR is one indicator of a broader Chinese push to continue pursuing its vision for a global governance system, even amid a catastrophic international crisis.

The COVID-19 pandemic and the promotion of the HSR could also incentivize Chinese companies to export health-related technological platforms to BRI countries, particularly diagnostic systems and digital health-monitoring tools. China’s efforts at combating COVID-19 have featured everything from use of its 5G networks to connect frontline workers and patients in remote locations to medical experts in Beijing, to robots’ taking patients’ vital measurements and drone deliveries of PPE, all supporting China’s drive for a technology-empowered global health system. Already China has offered AI-powered diagnostic technology to a few of its BRI partners and promoted 5G-based networks for the provision of remote health care. Huawei is offering cloud systems to store health data and hospital databases online.

Although there are some limits to China’s ability to export its technological platforms, particularly its digital contact tracing systems, as many BRI countries lack the capacity to implement such systems, the shift to providing digital health-care technology allows Beijing to keep BRI alive and of critical importance to a number of countries.

China is using the HSR to rebuild its reputation on the international stage.
 

One of China’s objectives in promoting the HSR and its “community of common health” is to shape the narrative about its role in the pandemic. Blamed worldwide for initially withholding information about the virus outbreak in Wuhan and for pressuring the WHO to praise China while holding back on declaring a Public Health Emergency of International Concern, China has sought to use its health diplomacy to shift the story away from China as the epicenter of the pandemic to one of Chinese contributions to addressing the problem.

Starting in March 2020, China began a campaign of “mask diplomacy” to provide PPE and testing kits to its BRI partners and others around the world. Chinese companies joined the efforts, with the Jack Ma Foundation donating more than two hundred million units of PPE, testing kits, and ventilators to more than 150 countries. Beijing dispatched medical teams to treat patients in numerous BRI countries and used its embassies to provide bilateral consultations on best practices for fighting COVID-19. It extended a $500 million loan to Sri Lanka and sent a team of experts to Bangladesh, both prominent BRI countries, to train medical professionals. Xi pledged to make a COVID-19 vaccine “a global public good” available to all, only more recently adding the caveat “at a fair and reasonable price” to his offer.

China also worked to enhance its role as a leader on global health issues. When the United States announced its withdrawal from the WHO in July 2020, China stepped up its contributions to the organization and increasingly relied on its growing clout within the WHO to project its ability to both lead and collaborate with others in the fight against the coronavirus. China played a coordinating role in multilateral forums to champion China’s international response to COVID-19. Chinese representatives have worked with ASEAN, the Shanghai Cooperation Organization, the Central and Eastern European 17+1 mechanism, and the African Union to ensure knowledge of best practices to combat the virus but also to tout Chinese success.

China’s effort to use the HSR and its mask diplomacy campaign to convince the world that it is a reliable and experienced global health partner has, however, had mixed success. A number of countries bristle at China’s demand for public praise of its generosity. Italy, for example, ended up paying under a commercial contract for the majority of the masks, ventilators, and other medical equipment it received from China and, in the end, received far more in donations from European countries. In addition, a growing list of complaints about faulty Chinese medical equipment and testing kits has marred the country’s reputation and underscored concerns over quality controls in China.

BRI partners closely aligned with Beijing, on the other hand, have been more willing to give China the praise it seeks, with Pakistan sending its president to China at the peak of the pandemic to show gratitude, Serbian President Alexander Vucic kissing the Chinese flag in appreciation, and billboards in Belgrade thanking “Brother Xi” for his help.

China can be expected to tighten its quality controls and continue to provide significant amounts of medical supplies and PPE to the world, so its mask diplomacy could ultimately meet with greater success in repairing its reputation and further pulling BRI countries into its sphere of influence.

China’s role as the world’s largest supplier of medical goods allows it to deepen commercial ties.
 

The COVID-19 pandemic highlighted the degree to which the world relies on China for many critical medical supplies, PPE, API, biotechnology products, and medical devices. Following the initial outbreak of the disease, China’s need to provide medical goods to its own citizens led to considerable concerns over shortages and increased costs in the rest of the world. Beijing imposed restrictions on exports and bought up foreign producers, thereby ensuring control over domestic supply and future dominance of worldwide production of PPE and other medical supplies. Even before the pandemic, China was the world’s largest exporter of surgical masks, protective clothing, medical goggles, and respirators, along with active pharmaceutical ingredients. In 2020, China exported 224 billion masks, enough to provide nearly 40 masks to every person living outside of China.

This dependence on China leaves countries vulnerable to a Chinese decision to stop exporting its medicines and their crucial ingredients and raw materials, which could lead to shortages. China could also use the world’s need for its supply to bolster dependence on trade networks with China, while using BRI partner countries as additional incubators for Chinese health-care systems and technology.

Even before the COVID-19 outbreak, China used the world’s demand for its medical goods to ramp up investment in and production of a broad array of medical supplies, biotechnology products, PPE, and pharmaceuticals. The sheer volume of production in China across the entire array of goods needed to fight the pandemic, along with substantial support from the government, has allowed Chinese companies to offer lower-cost products to its BRI partners. Because it manufactures so many medical supplies, China is likely to deepen commercial ties between Chinese medical, pharmaceutical, and PPE suppliers and BRI countries.

The HSR could decrease global reliance on U.S. leadership and expertise in global health.
 

The HSR could have significant implications for U.S. interests. It highlights a need for the United States to reinvest in its own health infrastructure while deepening its commitment to global health efforts. The United States has long held a policy of providing resources to improve public health outcomes in low- and middle-income countries around the world.

The United States is currently the world’s largest donor to global health, and its investment has grown significantly over time. U.S. foundations, particularly the Bill and Melinda Gates Foundation, have also been major investors in global health, leaving the United States with a strong reputation as a reliable partner in the health-care fight. Since fiscal year (FY) 2010, however, U.S. funding for global health has remained relatively flat, and the Donald J. Trump administration proposed significant funding reductions for FY 2020. In April 2020, the Trump administration went a step further by announcing that the United States would halt funding for the WHO, followed by a May 2020 declaration of the termination of the U.S. relationship with the organization.

These reductions in support and participation create a vacuum that China has been filling with its well-funded effort to assist its BRI partners in addressing their health-care needs. However, China’s ability to dominate the field of global health is limited. For example, China has not historically had a comparative advantage in offering on-the-ground international health training and is unlikely to develop it now.

Recent Chinese overtures during the COVID-19 pandemic have been amplified by the relative failure of the United States to adequately contain the virus at home, much less assume a global leadership role during the crisis. In addition to withdrawing from the WHO, the United States put export controls on PPE, thereby cutting off supplies to a number of countries in need. On top of the cuts in federal funding for global health, the Trump administration redirected foreign aid and some of the work of the Development Finance Corporation (DFC) toward domestic efforts to secure supplies of PPE and other medical supplies rather than helping poor countries in need. Although China joined COVAX—the vaccine partnership that aims to ensure equitable distribution of the COVID-19 vaccine and the provision of subsidized vaccines to poorer countries—the United States initially refused to do so. The Biden administration has indicated it will join COVAX, but, as of January 2021, the specific contours of its participation in that effort have yet to be defined.

To its credit, however, the DFC recently announced a new Health and Prosperity Initiative, which includes a proposed $2 billion in support for health-related investments in developing countries. This effort, if backed with sufficient resources, could allow the United States to regain some of its lost influence. In addition, the United States’ successful development of three vaccines for COVID-19 and its mass vaccination efforts underway could help rebuild soft power through demonstrated expertise in marshaling resources to so quickly produce the vaccines, demonstrate the innovative capacities of U.S. companies, and better position the country to compete with China in projecting international influence in the health realm.

For its part, China has begun prioritizing its partner BRI countries for vaccine distribution, promising free vaccines across Africa and Southeast Asia, announcing $1 billion in loans to help Latin American and Caribbean countries purchase vaccines, and pledging one hundred thousand free doses to Bangladesh. For at least sixteen countries, China’s promise to provide vaccines was made in exchange for help with carrying out vaccine trials, given the low number of COVID-19–infected candidates for testing in China. Although most of these countries were grateful for the partnership, others have raised concerns over whether they are being used as human guinea pigs in support of Chinese pharmaceutical companies. These collaborations made it possible for China’s fifth vaccine candidate to enter its final, third-phase clinical trials as of December 2020, with mid-September marking the first foreign approval, by the United Arab Emirates, of one of China’s earlier vaccines.

China has demanded public statements of gratitude for its efforts and in some instances sought more than just thanks for the provision of its vaccines to others. When Philippines President Rodrigo Duterte pled for access to Chinese vaccines, he reiterated that the Philippines would not confront Beijing over its South China Sea claims or host U.S. military bases.

Beijing’s vaccine diplomacy presents far more significant opportunities than its mask diplomacy, potentially allowing China to become the undisputed health-care supplier to the developing world provided things go well with its vaccines. Although twenty-four countries have signed deals to acquire Chinese vaccines, some political and medical leaders in these nations have voiced concerns about their quality and efficacy. Left unaddressed, these concerns could create lasting reputational costs for China. In addition, Beijing could also face trade-offs between the need to vaccinate its population and its vaccine diplomacy, as its capacity to manufacture vaccines will likely fall short of demand.

Either way, the U.S. withdrawal from providing global health leadership gives China numerous ways to use its HSR to reframe the narrative about the pandemic, to shore up long-term markets for its producers of medical goods, PPE, pharmaceuticals, and health-care technology, and to assert itself as the leader in providing health care to the developing world.

The United States has become increasingly critical of BRI, but its blanket condemnation risks alienating partners.
 

When Xi Jinping announced BRI, the Obama administration was well into its second term and executing its “pivot” or “rebalance” to Asia. At the time, BRI lacked its present geographic breadth and multi-domain security significance. The United States and China were simultaneously competing in areas such as the South China Sea and cooperating on more transnational issues than they are today. Debt crises along the Belt and Road had yet to emerge, and China had not yet taken control of strategic assets, such as the Hambantota Port, or so explicitly used the economic leverage provided by BRI to coerce host countries.

To most analysts, it was not clear that BRI put U.S. interests at risk. The United States viewed cooperation with China to address the North Korean nuclear threat, negotiate an end to Iran’s nuclear ambitions, and bring the world together under the Paris Climate Accords as legitimate affirmative objectives. As a result, the U.S.-China bilateral relationship reflected the transnational issues at stake, and the administration took a more hands-off approach to BRI.

Although the Obama administration did not formally articulate a position on BRI, its perspective was evident in efforts to conclude negotiations for the Trans-Pacific Partnership (TPP, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP), which would have formed a trade block representing 40 percent of global output, made the United States more economically competitive in Asia, and put pressure on China to raise its standards.

The Obama administration also made smaller commitments to connecting and investing in the Indo-Pacific and launched its Power Africa public-private partnership to electrify Africa.323 It created a Global Procurement Initiative at the U.S. Trade and Development Agency (USTDA) to provide developing countries with a tool kit for more open and transparent procurement practices, better methods to determine fair value for purchases, and assistance in selecting smarter and more sustainable infrastructure.324

Not wanting to impede efforts to fill sizable investment gaps in Asia, Obama and other senior administration officials instead stressed the importance of ensuring high transparency and governance standards across Chinese initiatives, including BRI and AIIB.325 They feared, as Obama explained in making the case for TPP, that “if we don’t write the rules, China will write the rules.”326 Ultimately, BRI received modest policy attention in its first few years under the Obama administration, even as senior officials made public and private efforts to encourage sustainable and transparent economic practices across a set of Chinese bilateral and multilateral projects.

The Trump administration, faced with a BRI that had gone global, Chinese efforts to use BRI to set international standards and establish a foothold for the spread of Chinese-controlled digital technologies, and evidence that many of its projects were not economically sustainable, was blunt about its efforts to counter BRI. The United States employed a range of tools to do so, including publicly raising flags about harmful elements of BRI, redesigning U.S. government agencies to better compete with China on strategic infrastructure, working to mitigate the risks that Huawei and other Chinese technologies in BRI countries present to U.S. interests, and shining a light on bribery and corruption along BRI.

Over the past few years, senior officials have publicly warned countries about the risks of getting involved in BRI, mainly emphasizing the debt burden of BRI projects and China’s use of BRI to increase its coercive leverage. U.S. Secretary of State Mike Pompeo accused China of using BRI to try to purchase an “empire” and vowed “to oppose them at every turn.”327 Addressing Asia-Pacific Economic Cooperation (APEC) members in 2018, Vice President Mike Pence warned countries, “Do not accept foreign debt that could compromise your sovereignty. . . . The United States deals openly, fairly. We do not offer a constricting belt or a one-way road.”328 National Security Advisor John Bolton argued BRI had the “ultimate goal of advancing Chinese global dominance.”329 Admiral Philip Davidson, commander of U.S. Indo-Pacific Command, charged that BRI was “a stalking horse to advance Chinese security concerns.”330

The U.S. response to BRI has been insufficient.
 

The United States has undertaken welcome initiatives to retool its government agencies to better compete with China in BRI countries. In October 2018, Trump signed into law the Better Utilization of Investments Leading to Development (BUILD) Act, which created the Development Finance Corporation (DFC) to replace the U.S. Overseas Private Investment Corporation (OPIC) as the country’s official development bank. Sixty billion dollars, or twice as much money as OPIC had available to it, was provided to the DFC to invest in infrastructure projects in the developing world. The U.S. Agency for International Development (USAID)’s Development Credit Authority was also transferred to DFC, and the DFC was given additional authorities, such as the ability to do business with non-U.S. companies, take equity stakes in projects, and lend to SOEs.

The Trump administration hoped that these new authorities would allow the DFC to provide more flexible financing terms and, with the U.S. government as a partner, lower the political and regulatory risks for participation by the U.S. private sector. The intent was to provide a counterweight to China’s state-centric BRI by catalyzing private capital and helping the private sector compete in frontier markets.

The United States has also sought to position the Export-Import Bank of the United States (U.S. EXIM) to better compete with China. In 2019, China provided official export credits totaling more than six times that offered by the United States, and over the past five years China’s official export credit activity equaled 90 percent of that provided by all G7 countries combined.337 Much of this financing went to BRI countries.

Recognizing the need to offer alternatives to BRI, in 2019 Congress passed a historic seven-year authorization for U.S. EXIM. Congress directed it to establish a “Program on China and Transformational Exports,” which provides U.S. EXIM with the authority to offer lower rates and more flexible terms to compete with Chinese loans in high-tech sectors, including 5G, renewable energy, and fintech. Congress instructed U.S. EXIM to devote not less than 20 percent of its financing authority—$27 billion—to this program.332 In December 2020, U.S. EXIM’s board of directors voted to relax U.S. content requirements for companies to qualify for export financing in ten sectors identified in the Program on China and Transformational Exports, a welcome development that should help U.S. companies better compete with China along the Belt and Road.333

The United States, Australia, and Japan announced an effort to cofinance infrastructure in the Asia-Pacific. This trilateral initiative was followed by the unveiling in November 2019 of the Blue Dot Network (BDN), a body that would certify infrastructure projects around the world that have met high standards of governance, transparency, and developmental efficacy. The hope was that if a project received the Blue Dot seal of approval, private capital would have more confidence in it and be more likely to provide funding. Both DFC and BDN are attempts to incentivize U.S. pension and insurance funds to invest a percentage of the trillions of dollars they manage in infrastructure, which would present a serious alternative to BRI.334 It is unclear, however, whether BDN has the resources to fulfill its mission; it is currently buried within the State Department’s website, lacks dedicated staff to vet projects, and provides nowhere for an applicant to submit a project for review.335

Responding to BRI’s inroads in the United States’ own hemisphere, where the initiative has grown to include nineteen countries in Latin America and the Caribbean, the State Department unveiled Growth in the Americas (América Crece), which aims to promote private-sector investment in infrastructure in the region. Under this whole-of-government effort, the United States works with countries to improve their regulatory regimes in order to make them more attractive to U.S. investors, supports project financing, undertakes feasibility studies, and holds trade missions. So far, Argentina, Chile, Guyana, Jamaica, Panama, and Suriname have signed MOUs joining this initiative. At the same time, the program explicitly notes it “primarily leverages existing programs, diplomatic engagement, technical expertise, and partnerships to achieve initiative goals and objectives.”336

In order to mitigate the perceived national security risks of Chinese-built 5G telecommunications infrastructure, the Trump administration leveraged the United States’ dominance of advanced semiconductors, barring sales of essential computer chips to Huawei without a specific license.337 Access to U.S. chips, particularly 5G-related semiconductors that enable wireless communications, network management, and data storage, is crucial to Huawei, which is reported to be running out of supply.338 The administration, however, undercut the credibility of its national security argument when it made clear that it viewed these restrictions on sales to Huawei as a bargaining chip in trade negotiations with China.339 In response, realizing how reliant its companies remain on U.S. technology, China has begun to redouble efforts to develop its indigenous industry and break the stranglehold. Should China successfully wean itself off U.S. semiconductors and develop its own alternative, the United States would lose a significant source of leverage that it could employ during a potential crisis.

Recognizing the DSR’s potential to entrench Chinese technology companies in the critical infrastructure of BRI countries, the Trump administration pressured countries not to use Chinese components in their 5G infrastructure. In 2020, Secretary of State Pompeo announced a Clean Network initiative intended to promote data privacy and security along 5G networks. More than thirty carriers around the world have joined this initiative and pledged to exclude Chinese components in their 5G infrastructure.340 This was later expanded to include a “Clean Cable” effort that aims to ensure China cannot compromise the information carried by undersea cables.341

The work of other government programs has taken on renewed urgency in light of BRI. USAID’s Power Africa program, for example, has signed 124 power generation deals worth more than $22 billion, with forty-seven plants already operational.342 Power Africa’s private-public partnership approach of bringing together African partners, the private sector, NGOs, private capital, and multilateral donors stands in contrast to BRI’s largely government-to-government, top-down approach. Similarly, the Commerce Department’s Commercial Law and Development Program (CLDP) has shifted to efforts that indirectly respond to China’s BRI activities. In Africa, CLDP is assisting Power Africa by encouraging African officials to insist on international best practices and terms in their energy and power purchase contracts. CLDP’s efforts in Central Asia have focused on the development of transparent and accountable public procurement systems that will leave Central Asian governments better prepared when contracting with China. In Southeast Asia, work is concentrated in the energy sector and in developing transparent legal and procedural frameworks to oversee complex infrastructure projects.343

Although many of these policies and programs are welcome, the response to BRI has been too little, too late. The Trump administration’s decision to eschew multilateralism and step back from the historic role the United States has played coordinating allies and partners in addressing shared challenges has also undermined the U.S. response to BRI. The Trump administration also undercut its own objectives, arguing countries should ban Huawei and ZTE on national security grounds but then agreeing that relief for Huawei could be a part of trade negotiations and lifting sanctions on ZTE because of “too many jobs in China lost.”344

Ultimately, the scattershot U.S. response has failed to protect its interest in encouraging sustainable and inclusive development, maintaining fair access to overseas markets for U.S. goods and services, setting standards that will promote quality digital and hard infrastructure, and ensuring macroeconomic stability and growth.

• 323<p>For example, a $1.2 billion electricity project in Central Asia; Kevin Hartnett, “<a href="http://politico.com/agenda/story/2015/05/china-america-silk-road-infrastructure-war-000031">Should China’s ‘New Silk Road’ Worry America?</a>,” <em>Politico</em>, May 26, 2015; USAID, “<a href="https://www.usaid.gov/sites/default/files/documents/1860/PA_FINAL_508c.PDF">Power Africa: A 2017 Update</a>,” USAID Office of Press Relations, December 4, 2017. </p>
• 324<p>More information on this initiative can be found at “<a href="http://ustda.gov/ustda-special-initiative/global-procurement-initiative">Global Procurement Initiative</a>,” U.S. Trade and Development Agency, accessed December 31, 2020. </p>
• 325<p>In remarks in the Rose Garden with President Xi during a 2015 state visit, President Obama said of BRI and AIIB, “All of their aims are to expand mutual and beneficial cooperation with other countries and realize common development. These initiatives are open, transparent, inclusive. They are consistent in serving the interests of the U.S. and other countries’ interest. And we will come—the U.S. and other parties—to actively participate in them.” White House Office of the Press Secretary, “<a href="http://obamawhitehouse.archives.gov/the-press-office/2015/09/25/remarks-president-obama-and-president-xi-peoples-republic-china-joint">Remarks by President Obama and President Xi of the People’s Republic of China in Joint Press Conference</a>,” White House Archives, September 25, 2016; Secretary of the Treasury Jacob Lew emphasized that it is “critical that China be willing to embrace…high standards of governance and transparency in its own initiatives.” Jacob J. Lew, “<a href="http://aei.org/press/prepared-remarks-treasury-secretary-jacob-j-lew-remarks-on-u-s-china-economic-relations-at-the-american-enterprise-institute">Prepared Remarks: Treasury Secretary Jacob J. Lew Remarks on U.S.-China Economic Relations at the American Enterprise Institute</a>,” AEI, June 16, 2016. </p>
• 326<p>Gerald F. Seib, “<a href="http://wsj.com/articles/obama-presses-case-for-asia-trade-deal-warns-failure-would-benefit-china-1430160415">Obama Presses Case for Asia Trade Deal, Warns Failure Would Benefit China</a>,” <em>Wall Street Journal</em>, April 27, 2015. </p>
• 327<p>Michael R. Pompeo, interview with Hugh Hewitt, <a href="https://2017-2021.state.gov/interview-with-hugh-hewitt-of-the-hugh-hewitt-show/index.html"><em>Hugh Hewitt Show</em></a>, October 26, 2018. </p>
• 328<p>Mike Pence, “<a href="https://trumpwhitehouse.archives.gov/briefings-statements/remarks-vice-president-pence-2018-apec-ceo-summit-port-moresby-papua-new-guinea/">Prepared Remarks by Vice President Pence at 2018 APEC CEO Summit</a>,” White House, November 16, 2018. </p>
• 329<p>John R. Bolton, “<a href="https://td.usembassy.gov/remarks-by-national-security-advisor-ambassador-john-r-bolton-on-the-trump-administrations-new-africa-strategy/">Remarks by National Security Advisor Ambassador John R. Bolton on the Trump Administration’s New Africa Strategy</a>,” White House, December 13, 2018. </p>
• 330<p>Admiral Philip S. Davidson, “<a href="http://lowyinstitute.org/news-and-media/multimedia/audio/philip-s-davidson-united-states-interests-indo-pacific">Philip S. Davidson on the United States’ Interests in the Indo-Pacific</a>,” Lowy Institute, February 13, 2020. </p>
• 337a337b<p><em><a href="https://www.exim.gov/sites/default/files/reports/competitiveness_reports/2019/EXIM_2019_CompetitivenessReport_FINAL.pdf">Report to the U.S. Congress on Global Export Credit Competition</a> </em>(EXIM, June 2020). </p>
• 332<p>EXIM’s Charter states, “The Bank shall establish a Program on China and Transformational Exports to support the extension of loans, guarantees, and insurance, at rates and on terms and other conditions, to the extent practicable, that are fully competitive with rates, terms, and other conditions established by the People’s Republic of China.” <a href="http://exim.gov/sites/default/files/exim-bank-2019-charter-as-amended.pdf"><em>Export-Import Bank Act of 1945. Pub</em></a>. L. No. 116-94, 12 U.S.C. § 635 (2020); For more on the Program on China and Transformational Exports, see “<a href="http://exim.gov/who-we-serve/external-engagement/program-on-china-and-transformational-exports">Program on China and Transformational Exports</a>,” EXIM, accessed December 30, 2020. </p>
• 333<p>“<a href="http://exim.gov/news/exim-board-unanimously-approves-historic-policy-support-exporters-competing-peoples-republic">EXIM Board Unanimously Approves Historic Policy to Support U.S. Exporters Competing With the People’s Republic of China</a>,” EXIM, December 18, 2020. </p>
• 334<p>Matthew Goodman, Daniel Runde, and Jonathan Hillman, “<a href="http://csis.org/analysis/connecting-blue-dots">Connecting the Blue Dots</a>,” Center for Strategic and International Studies, February 26, 2020. </p>
• 335<p>The Blue Dot Network’s webpage can be found at: “<a href="http://state.gov/blue-dot-network">Blue Dot Network</a>,” U.S. Department of State. </p>
• 336<p>“<a href="http://state.gov/wp-content/uploads/2019/11/America-Crece-FAQs-003-508.pdf">Growth in the Americas: Frequently Asked Questions</a>,” U.S. Department of State, August 2019; Matt Youkee, “<a href="http://theguardian.com/world/2020/oct/01/us-latin-america-china-beijing">U.S. Makes Fresh Pitch to Latin America to Counter China’s Influence</a>,” <em>Guardian</em>, October 1, 2020. </p>
• 338<p>Chris Miller, “<a href="http://nytimes.com/2020/09/15/opinion/united-states-huawei.html">America Is Going to Decapitate Huawei</a>,” <em>New York Times</em>, September 15, 2020. </p>
• 339<p>Doina Chiacu and Stella Qiu, “<a href="http://reuters.com/article/us-usa-trade-china/trump-says-dangerous-huawei-could-be-included-in-u-s-china-trade-deal-idUSKCN1ST0PA">Trump Says ‘Dangerous’ Huawei Could be Included in U.S.-China Trade Deal</a>,” Reuters, May 23, 2019; Bob Davis, William Mauldin, and Lingling Wei, “<a href="http://wsj.com/articles/trump-says-he-is-set-to-discuss-huawei-with-xi-11561769726">Trump Allows U.S. Sales to Huawei as Trade Talks Resume</a>,” <em>Wall Street Journal</em>, June 29, 2019. </p>
• 340<p>Roslyn Layton, “<a href="https://www.forbes.com/sites/roslynlayton/2020/09/04/state-departments-5g-clean-network-club-gains-members-quickly/?sh=2c3ef1947536">State Department’s 5G Clean Network Club Gains Members Quickly</a>,” <em>Forbes</em>, September 4, 2020. </p>
• 341<p>Michael R. Pompeo, “<a href="https://it.usembassy.gov/secretary-michael-r-pompeo-at-a-press-availability-2/">Secretary Michael R. Pompeo at a Press Availability</a>,” U.S. Department of State, August 5, 2020. </p>
• 342<p>“<a href="https://www.usaid.gov/sites/default/files/documents/PowerAfrica_Fact_Sheet-Draft-01132021.pdf">Power Africa Fact Sheet</a>,” USAID, November 30, 2020. </p>
• 343<p>Yanzhong Huang, “<a href="https://www.thinkglobalhealth.org/article/why-mass-vaccination-west-could-be-bad-news-chinese-leaders">Why Mass Vaccination in the West Could Be Bad News for Chinese Leaders: To Narrow the Immunity Gap, China Could Be Forced to Prioritize its Domestic Vaccine Needs</a>,” <em>Think Global Health</em>, December 10, 2020; Sui-Lee Wee, “<a href="http://nytimes.com/2021/01/25/business/china-covid-19-vaccine-backlash.html">China Wanted to Show Off Its Vaccines. It’s Backfiring</a>,” <em>New York Times</em>, January 25, 2021. </p>
• 344<p>Yanzhong Huang, “<a href="https://www.thinkglobalhealth.org/article/why-mass-vaccination-west-could-be-bad-news-chinese-leaders">Why Mass Vaccination in the West Could Be Bad News for Chinese Leaders: To Narrow the Immunity Gap, China Could Be Forced to Prioritize its Domestic Vaccine Needs</a>,” <em>Think Global Health</em>, December 10, 2020; Sui-Lee Wee, “<a href="http://nytimes.com/2021/01/25/business/china-covid-19-vaccine-backlash.html">China Wanted to Show Off Its Vaccines. It’s Backfiring</a>,” <em>New York Times</em>, January 25, 2021. </p>