Belt and Road

Ten Years On, China’s Belt and Road Initiative Rolls On – But Faces Hurdles

Wednesday, July 12, 2023

A decade after its rollout, China’s Belt and Road Initiative continues, though it has hit obstacles along the way – the pandemic, the Ukraine war, and criticism about governance, transparency and debt incurred by host countries. Fithra Faisal Hastiadi of Universitas Indonesia, Adelbertus Irawan J Hartono of Parahyangan Catholic University, Nur Rachmat Yuliantoro of Universitas Gadjah Mada in Indonesia and Claude Rakisits of Australian National University assess Beijing’s signature foreign economic policy program and its impact and future in Southeast Asia, particularly Indonesia, and in Pakistan.

Ten Years On, China’s Belt and Road Initiative Rolls On – But Faces Hurdles

Trial run of the Bandung-Jakarta high-speed rail, November 2022: The Belt and Road Initiative is one of the boldest economic projects ever conceived, spanning more than 140 countries and requiring an estimated US$8 trillion in investment (Credit: Algi Febri Sugita / Shutterstock)

Ten years into its hugely ambitious Belt and Road Initiative (BRI), China’s effort to help countries, particularly key trading partners, build infrastructure across the global, is facing a reckoning as the combination of Covid-19 disruptions, cost blowouts and domestic issues force Beijing to reassess the project’s scale. Launched in 2013 to enhance connectivity and promote economic cooperation beyond Asia, and drawing inspiration from the historical success of the Silk Road, the initiative is one of the boldest economic projects ever conceived, spanning more than 140 countries and requiring an estimated US$8 trillion in investment.

The Covid-19 pandemic forced China to reassess the initiative’s priorities and scale. China is now focused on a more inward-looking economic policy, with the outcomes of this shift shaping not only BRI infrastructure projects but the economic and geopolitical landscape in the Asia Pacific and beyond. Key challenges include astronomical costs, debt sustainability, market access and disruptions to the Chinese domestic economy, illustrated by the collapse of the Evergrande property group.

Overcoming these obstacles will require a soft-power strategy that leverages regional cooperation and economic partnerships and embraces technological advancements. Rebranding the initiative as a regional collaboration and exploring innovative strategies can help drive new momentum and adapt the initiative to changing circumstances. 

While the BRI still holds great potential, there are several challenges that could hinder its success:

Hambantota Port, Sri Lanka: The poster project for critics who argue that, with the BRI, China has been pursuing "debt-trap diplomacy" (Credit: Ruwan Walpola /

Hambantota Port, Sri Lanka: The poster project for critics who argue that, with the BRI, China has been pursuing "debt-trap diplomacy" (Credit: Ruwan Walpola /

Costs The estimated trillions of dollars in costs pose a significant burden on participating countries. Although China has established financial mechanisms such as the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund, concerns persist regarding the sustainability and availability of funding sources. The scarcity of capital for both China and recipient countries can impede the pace and scale of project implementation.

Debt traps The initiative’s reliance on loans and investments can lead to concerns over the ability of recipient countries, especially those with weaker economies, to manage and repay substantial loans associated with Belt and Road projects. This can trap countries in a cycle of debt, compromising their long-term economic stability and sovereignty. Ensuring sustainable debt levels and providing adequate financial safeguards is essential to mitigate the risk of debt distress.

Collaboration problems The diverse economic landscapes of participating countries pose challenges in achieving balanced economic development. Disparities in income levels, technological capabilities, and industrial structures can hinder collaboration and create uneven benefits among partners. Efforts should be made to promote inclusive growth, foster technology transfer and support capacity building to address these imbalances.

Market access Various barriers such as trade restrictions, inadequate infrastructure and regulatory complexities can impede the smooth flow of goods, services and investments. Addressing non-tariff barriers, harmonizing standards and streamlining customs procedures are crucial for creating a conducive environment for cross-border trade and investment. Ensuring fair and open access to markets will facilitate economic integration and bolster the success of the initiative.

Transparency Uncertainty surrounding China's domestic economy and the potential for a slowdown in economic growth may make investors hesitant to commit to large-scale infrastructure projects. For example, the Evergrande Group, one of China's largest property developers, faced significant financial difficulties over the years, raising concerns about its ability to repay its massive debt obligations. The potential repercussions of the Evergrande crisis and mounting debt, particularly at the provincial and local levels, could disrupt China's domestic economy and have implications for its overseas investments, including those related to the BRI.

The Evergrande case has also highlighted concerns about corporate governance and transparency in China. The BRI relies heavily on partnerships and collaborations between Chinese companies and their international counterparts, so questioning the credibility and trustworthiness of Chinese firms involved in BRI projects could lead to increased scrutiny and more stringent due diligence processes for potential partners.

High speed, high risk: Indonesia's President Jokowi and Chinese leader Xi Jinping witness the trial run of the Jakarta-Bandung rail link, November 16, 2022 (Credit: CGTN on YouTube)

Obstacles in partner nations

Large-scale infrastructure projects may also encounter country-specific obstacles such as regulatory issues, political disagreements, public opposition and difficulties in securing funding. Indonesia’s high-speed rail project which will finally become operational this year, was delayed more than four years due to financing, land acquisition and disagreements between the Indonesian government and the Chinese consortium responsible for construction. These setbacks can disrupt project timelines, lead to cost overruns and even result in project cancellations.

The way forward

The road ahead may be uncertain, but new strategies and approaches could shore up its future. The BRI is often perceived as a manifestation of Chinese geopolitical dominance in the region, particularly by the West. This is understandable, given China's newfound assertiveness. While China has moderated its approach in recent years, the initial rapid pace of development created a psychological barrier for many potential collaborators. Friendshoring activities further complicate the situation.

One potential solution could be a soft-power strategy that leverages economic partnerships and embraces technological advancements. For instance, a cloud Silk Road strategy could provide a completely innovative approach. More regional trade cooperation through free trade agreements and other mechanisms such as the Regional Comprehensive Economic Partnership (RCEP) framework and the ASEAN Free Trade Agreement (AFTA) and the ASEAN Economic Community (AEC) may also hold the key.

For the BRI to gain momentum, China needs to promote collaboration and rebrand it as a regional initiative instead of persistently pushing the original concept. Beijing is cognizant of the criticisms of the initiative and must effectively tackle the obstacles that have emerged. In doing so, China can renew its efforts to achieve the BRI’s ambitious goals of enhancing connectivity, promoting economic cooperation, and facilitating regional development.

Connectivity: Chinese engineers marking the first seamless welding of the Vientiane-Kunming rail line project, June 18, 2020 (Credit: Kaikeo Saiyasane/Xinhua)

Case study: ASEAN and Indonesia

China is strengthening its economic ties with its neighbors in Southeast Asia through the Association of Southeast Asian Nations (ASEAN), the region's economic and political grouping. China has recently been working with ASEAN to upgrade their free trade agreement. The outlook for the BRI should be assessed in this context.

The BRI is important to ASEAN, a 700-million-strong regional economy. China's southern mainland forms a land border with many ASEAN countries, shaping lots of projects in the works. China is in a long-running dispute with five other claimants (Brunei, Indonesia, Malaysia, the Philippines and Vietnam) over the sovereignty and control of various zones of the South China Sea.

BRI projects abound across ASEAN. In Laos, China provided financing for a transborder railway to connect capital city Vientiane with Kunming in southwest China, while Cambodia has a highway, a communication satellite and an international airport on the way. In Timor-Leste, China has invested in a highway, a port and built a national power grid that it operates and maintains. Indonesia's mass transit and railway has benefited from BRI (notably the Bandung-Jakarta high-speed rail project – see below), while Vietnam landed a new tramline.

China has taken a special interest in Myanmar and is the only country to invest consistently in the country since 1988. Along with two highways, China and Myanmar are working on a deep-sea port in Kyaukpyu and launched a joint radar and satellite communication laboratory in 2018. Singapore, meanwhile, is not just a partner in the BRI but is also a founding member of the Beijing-based AIIB.

Most ASEAN countries perceive the BRI as an opportunity to build up their infrastructure and boost their domestic economy, especially ahead of an anticipated slump in global growth. The biggest beneficiaries from Belt and Road in ASEAN are moderate-sized economies which are taking advantage of China's offer to collaborate to help themselves, without falling into a debt trap where they owe more than they can pay.

Smaller economies in the region should be the most cautious when signing up for Belt and Road projects, as they are more vulnerable to political pressure from China (in particular, regarding disputes over the South China Sea). This is especially the case for Laos, Myanmar, Cambodia and Timor-Leste, which are reliant on generous lending terms from China. But so long as the ASEAN countries involved in the BRI can pay their debts and assess the potential benefits of the costly projects to which they are committing, the initiative can continue on as a shot in the arm for the region's economy.

By land and sea: China's trans-Eurasian Belt and Road Initiative (Credit: YIUCHEUNG and NASA/

But major economies in ASEAN have had their issues with BRI projects. In an unprecedented move, in May 2023 former Indonesian vice president Jusuf Kalla, in controversial remarks about ethnic Chinese controlling the domestic economy, spoke out against the willingness of the incumbent administration in Jakarta to let China dominate the Indonesian economy. Kalla claimed that the country's debt had bloated to 1,000 trillion rupiah or US$67 billion, a figure at odds with government data.

Indonesian President Joko Widodo, known as Jokowi, who came to office in 2014, recognized a natural fit between Indonesia's untapped marine resources and China's enthusiasm to expand its economic ties and commercial activities in the region. Jakarta knows that cooperation with China is important, but its engagement in the BRI is a measured play to protect its interests and maintain sovereignty.

With their respective economic strengths, China and Indonesia have valuable assets for increasing cooperation and chasing shared interests through BRI. The Indonesian government's commitment to speeding up infrastructure development lines up well with the goals of the BRI. Indonesia needs investment in many sectors: better transportation networks, more roads, airports, ports and other public facilities that could help improve logistical efficiency.

The BRI's emphasis on regional connectivity and economic cooperation aligns with Indonesia's goals and presents opportunities for everyone to win. Leveraging their strong bilateral relations and economic prowess, China and Indonesia can work together to drive sustainable development and prosperity within the framework of Belt and Road.

While Indonesia's economy has grown significantly, red tape and bureaucracy continue to hinder progress. The government's efforts to reform bureaucracy have had mixed results despite the passing of several economic policy packages aimed at streamlining regulations and law enforcement.

The US$6.2 billion high-speed railway project connecting Jakarta and Bandung is an example of the challenges posed by Indonesian bureaucracy. The project commenced in 2015 but land clearance issues and regulatory hurdles have left it suspended. After many adjustments, especially on budget issues, the limited operation of the railway is scheduled for August 2023.

By prioritizing its maritime strength, Indonesia can align its development goals with Chinese leader Xi Jinping's vision of advancing his country's economic interests through the sea. Building port infrastructure and improving inter-port connectivity would benefit both countries and facilitate trade activities. Jokowi’s initiatives – such the Global Maritime Fulcrum – align well with China's emphasis on sea-based cooperation, creating collaborative opportunities. The two countries, however, must resolve or set aside their dispute over the part of the South China Sea, which Jakarta refers to as the North Natuna Sea, around the Natuna Islands, which Indonesia controls.

In dispute: Competing claims in the South China Sea (Credit: Goran tek-en)

In dispute: Competing claims in the South China Sea (Credit: Goran tek-en)

China’s BRI, however, comes with risks as well as opportunities. Concerns arise when recipient countries struggle to repay their loans from China, leading to a loss of control over the infrastructure projects. Indonesia's increased debt under Widodo's administration highlights the need for caution in managing financial obligations tied to the BRI.

The influx of Chinese workers into Indonesia is another situation worth monitoring. While Chinese labor and technology can contribute to project efficiency, the availability of local job opportunities and potential illegal labor practices create social tensions. Stricter controls and enforcement mechanisms to ensure compliance with labor laws would help maintain social order.

Indonesians have varied views on China and its ambitious BRI, according to a study conducted by the Centre for Strategic and International Studies (CSIS) in Jakarta. The perception of China among Indonesian bureaucrats and academics has been mostly negative, with concerns about China's economic power and its potential threat to Indonesia's national interests. Suspicion and a lack of trust have shaped perceptions from people who question China's true intentions in Indonesia.

But some Indonesians support the initiative, seeing an alignment with Indonesia's own maritime ambitions. Others were pessimistic, fearing that the BRI would further strengthen China's dominance over Indonesia in economic competition. A significant number have adopted a cautious "wait-and-see" approach towards the initiative.

The BRI holds potential for infrastructure development which aligns with Indonesia's national development plans aimed at promoting the welfare of its people. Some commentators believe Indonesia is the ASEAN country poised to benefit most from the initiative, with over US$87 billion allocated to infrastructure projects. To maximize the benefits and address potential challenges, Indonesia must balance its national development goals with the BRI. Environmental conservation considerations should be integrated into infrastructure projects, especially regarding sustainable energy and clean water supply.

The BRI has its problems, but Indonesian democratic system should provide guardrails against adverse consequences. As long as Indonesia maintains its governance checks and balances, it will continue to pursue the right approach to the initiative. Other nations such as Pakistan (see below) have learned the hard way about the consequences of poor governance and weak agency, and Indonesia should not underestimate its own capabilities.

Case study: Pakistan

The ambitious US$60 billion China-Pakistan Economic Corridor, which stretches almost 3000 kilometers from the port of Gwadar in Pakistan’s rugged southwestern province of Balochistan to Kashgar in the western Chinese region of Xinjiang, was launched 10 years ago – one of the earliest BRI projects. Labeled a “game changer” by its backers, the 30-year project includes the development of Gwadar, laying gas and oil pipelines from Gwadar to China, the building of small dams and hydroelectric power stations, the upgrading and construction of roads and railroads, and the development of numerous other projects, including a metro system in Lahore. Once completed, the Corridor had the potential to be the jewel in the BRI collection. It would also give Beijing access to the Indian Ocean, effectively making China a two-ocean country.

But instead, a decade since its launch, the project has become a cautionary tale – a severe burden on Pakistan, whose economy is staggering under the weight of massive foreign debt, a quarter which is owed to China.

Gwadar Port: The project has become a cautionary tale – a severe burden on Pakistan, whose economy is staggering under the weight of massive foreign debt, a quarter which is owed to China (Credit: Aleem Zahid Khan /

While the economic activity this project generated contributed to a rise in economic growth in Pakistan from 2015-2018, the ongoing import of machinery and other construction material, without a commensurate increase in exports, and the repayment of the Chinese loans to finance the Corridor projects, have significantly worsened Pakistan’s balance of payments crisis. Since 2016, Pakistan’s total foreign debt has almost doubled to a massive US$131 billion. Its interest repayments to China alone are crippling the country. Today, Pakistan’s central bank only has enough foreign exchange to cover at most a month’s worth of imports. The country is in the process of negotiating with the International Monetary Fund (IMF) for the release of over US$1 billion of a US$6.5 billion bail-out package. On June 29, Islamabad and the IMF agreed on a bigger-than-expected US$3 billion stand-by arrangement (SBA), which is to be voted on by the IMF Executive Board on July 12.

But the situation is so grave that Pakistan has had to borrow another US$1 billion from China to help tide over the country financially. It also received US$2 billion from Saudi Arabia.

A culmination of factors can explain why the Corridor did not deliver the economic shot in the arm Pakistanis were hoping for. For starters, China brought its own labor and housed them in isolated colonies, away from locals. Nobody knows how many thousands of Chinese workers are in Pakistan today. All the construction sub-contracts that Pakistani businesses had been hoping for and the employment they would generate have not materialized. This has created tension with local communities.

The port of Gwadar – leased to the Chinese government for 40 years in 2017 – has not delivered the maritime traffic everyone had been banking on. The plan had been to deliver a mega-port which would be a gateway to Central Asia. Instead, Gwadar’s port is under-used, isolated from its direct environment, in a neighborhood actively threatened by violent separatist Baloch terrorists.

Protesting austerity measures in Pakistan: A situation so grave that Islamabad has had to borrow another US$1 billion from China to help tide over the country financially (Credit: @AWPSindh on Twitter)

Protesting austerity measures in Pakistan: A situation so grave that Islamabad has had to borrow another US$1 billion from China to help tide over the country financially (Credit: @AWPSindh on Twitter)

Local Baloch militant groups are not the only ones who have threatened and killed Chinese workers. The Afghanistan-based Tehreek-i-Taliban Pakistan, which has increased its activities throughout Pakistan since the recapture of Kabul by the Taliban in August 2021, has regularly attacked Chinese targets. The most spectacular incident was in far northwest Pakistan in July 2021 when nine Chinese workers were killed. The attacks come despite the fact that 15,000 military personnel, as part of Pakistan’s Special Security Division and the Maritime Security Force, had been specifically deployed to protect Chinese personnel and the 34 CPEC-related projects along with the port of Gwadar.

China is upset with these attacks and has put a lot of pressure on Pakistan to rein in the group. Given its close ideological relationship with the Taliban in Afghanistan, however, Kabul has ignored the call from Islamabad for it to hunt down the militants in its territory.

Given Pakistan’s poor security and economic situation, it is no surprise to see that China’s level of investment in Pakistan has dropped in the last two years. Yet, notwithstanding these serious complications in the implementation of the Corridor and the ongoing security situation in Pakistan complicating an already difficult investment environment, China has invested too much in its relationship with Pakistan over the last 60 years for it to abandon the project or, for that matter, loosen its ties with Islamabad. Pakistan has played a critical geo-strategic role in China’s approach to countering India and expanding into the Indian Ocean. Similarly, Beijing has been a consistent supporter of Islamabad’s stance on Indian-administered Kashmir. Each nation has gained from that relationship.

Accordingly, the implementation of the China-Pakistan Economic Corridor, a flagship BRI project, will continue to stumble along, and eventually a cut-down version of it will likely be completed. But the question that will be asked for some time is whether the Corridor will have been in Pakistan’s long-term national interest.

This article is published under Creative Commons with 360info.

Opinions expressed in articles published by AsiaGlobal Online reflect only those of the authors and do not necessarily represent the views of AsiaGlobal Online or the Asia Global Institute


Fithra Faisal Hastiadi

Fithra Faisal Hastiadi

Universitas Indonesia

Fithra Faisal Hastiadi is a lecturer in the Faculty of Economy and Business at Universitas Indonesia. His research interests are monetary economics, international trade, development economics, political economy, and disruptive innovation. He is the author of Trade Strategy in East Asia: From Regionalization to Regionalism and editor of Globalization, Productivity and Production Networks in ASEAN: Enhancing Regional Trade and Investment, published in 2016 and 2019, respectively, by Palgrave Macmillan. He is the executive director of the think tank Next Policy in Depok City, West Java.

Adelbertus Irawan J Hartono

Adelbertus Irawan J Hartono

Parahyangan Catholic University

Adelbertus Irawan J Hartono is a lecturer in the Department of International Relations at Catholic University of Parahyangan in Bandung, Indonesia. His research interests are the international political economy and China's rise.

Nur Rachmat Yuliantoro

Nur Rachmat Yuliantoro

Universitas Gadjah Mada

Nur Rachmat Yuliantoro is an associate professor and the head of the Department of International Relations at Universitas Gadjah Mada in Yogyakarta, Indonesia. His main areas of interest are China's international relations, American foreign policy, and political corruption.

Claude Rakisits

Claude Rakisits

Australian National University (ANU)

Claude Rakisits is an honorary associate professor in the Department of International Relations at the Australian National University (ANU) and visiting research fellow at the Brussels-based Centre for Security, Defence and Strategy at the Vrije Universiteit Brussel (VUB).

Recent Articles
Recent Articles