Economic globalization with Chinese characteristics

Table of Contents

1 Introduction

2 Research method

3 Belt and Road Initiative (BRI)

3.1 Contributing factors to the emergence of the BRI

3.1.1 The ‘Go West’ strategy

3.1.2 The ‘Go Out’ strategy

3.1.3 The ‘China Dream’ and Xi Jinping’s new leadership

3.2 Revival of the Silk Road

3.3 Information on the Vision and Actions Plan and 13th Five Year Plan

3.4 Chinese financing of BRI

3.4.1 Asian Infrastructure Investment Bank (AIIB)

3.4.2 New Development Bank (BRICS Development Bank)

3.4.3 Silk Road Fund

3.4.4 Chinese policy banks

3.4.5 Chinese commercial banks

3.4.6 Infrastructure investment demand

3.4.7 Conclusion on Chinese BRI financing

3.5 China’s motivation for the BRI

3.5.1 Developing China’s western provinces

3.5.2 Overcapacity

3.5.3 Fostering exports and moving up the value chain

3.5.4 Renminbi internationalisation

3.5.5 Enhancing energy security

3.6 Risks and obstacles

3.6.1 Security risks

3.6.2 Unstable governments, lack of skills and China’s future leadership

3.6.3 Cooperation of all countries along the Belt and Road

3.6.4 Financial feasibility

3.6.4.1 China’s financial situation

3.6.4.2 Assumptions about the BRI project’s economic feasibility

3.6.4.3 Consequences for recipients

3.7 Conclusion on the BRI

4 BRI influence on economic development and economic growth of participating countries

4.1 BRI influence on economic development

4.1.1 Definition of economic development

4.1.2 Economic development theories

4.1.2.1 Economic development theories between the 50s and 90s

4.1.2.2 Paul Romer’s new growth theory

4.1.2.3 Theory of coordination failure and the big push theory

4.1.2.4 Conclusion on economic development theories

4.1.2.5 Belt and Road Initiative and economic development

4.2 BRI influence on economic growth through infrastructure

4.2.1 Transport infrastructure’s influence on economic growth

4.2.1.1 Macro- and micro-economic effects of increased transport infrastructure

4.2.1.2 Empirical evidence and requirements for economic growth

4.2.2 Economic profitability of Chinese infrastructure projects

4.2.3 Conclusion on BRI’s transport infrastructure

5 Conclusion

6 Limitations and further research

7 Appendix

8 Bibliography

Objectives and Topics

This master's thesis examines the Belt and Road Initiative (BRI) launched by China in 2013, with the primary objective of analyzing its economic characteristics and its true potential to foster economic development and growth in participating countries through large-scale infrastructure investments, rather than relying on simplistic assumptions of benefit.

• The economic motivations behind the BRI, including overcapacity, energy security, and currency internationalization.
• Theoretical frameworks of economic development and their applicability to the BRI model.
• The risks and obstacles to the initiative, such as financial feasibility, political instability, and security concerns.
• The specific impact of transport infrastructure projects on economic growth and development.

Excerpt from the Book

Summary of Chapters

1 Introduction: Provides an overview of the Belt and Road Initiative as a pivotal Chinese policy and states the objective of critically evaluating its economic feasibility and potential for development.

2 Research method: Explains the choice of a qualitative narrative literature review to analyze the complex economic aspects of the BRI due to limited data availability.

3 Belt and Road Initiative (BRI): Details the emergence, domestic motivations, financing mechanisms, and significant risks associated with the initiative.

4 BRI influence on economic development and economic growth of participating countries: Analyzes the theoretical underpinnings of economic development and the empirical evidence regarding the correlation between transport infrastructure and economic growth.

5 Conclusion: Summarizes findings, arguing that the BRI is currently an infrastructure project driven by Chinese interests, lacking broad developmental impact and carrying significant risks for participating countries.

6 Limitations and further research: Discusses constraints due to scarce information from official Chinese sources and the complexity of assessing the initiative's long-term economic impacts.

7 Appendix: Provides detailed data tables on participating countries, including economic indicators and classifications.

8 Bibliography: Lists the academic sources, reports, and news articles used throughout the thesis.

Keywords

Belt and Road Initiative, China, Economic Development, Economic Growth, Infrastructure Investment, Financing, Overcapacity, Foreign Direct Investment, Risk Assessment, Silk Road, Transport Infrastructure, Political Economy, Renminbi Internationalization, Debt Sustainability, Economic Policy.

Frequently Asked Questions

What is the core focus of this master's thesis?

The thesis explores the Belt and Road Initiative (BRI) with a specific focus on its economic characteristics and its potential to actually foster economic development in participating countries, rather than taking the claimed "win-win" outcome for granted.

What are the primary themes discussed in the work?

The work covers China's domestic motivations for the BRI, such as tackling industrial overcapacity, the mechanisms and entities involved in financing these massive projects, and the various risks, including financial feasibility and security concerns in recipient nations.

What is the central research question?

The central question is whether the BRI serves as a viable strategy to foster economic development in participating countries, assessed through the lens of economic development theories and the actual impact of large-scale infrastructure investments.

Which scientific methodology does the author use?

The author employs a qualitative narrative literature review, as quantitative approaches are deemed impractical due to the relative novelty of the policy, data scarcity, and the inherent complexity of the economic factors involved.

What key aspects are covered in the main body of the text?

The main body examines China's motivation (e.g., Go West/Go Out strategies), the role of various funding entities (AIIB, Silk Road Fund, policy banks), theoretical perspectives on economic development, and empirical evidence regarding the link between infrastructure and growth.

Which keywords best characterize this research?

Key terms include Belt and Road Initiative, infrastructure investment, economic development, debt sustainability, overcapacity, and China's foreign policy.

How does the author evaluate the economic profitability of Chinese infrastructure projects?

The author references empirical studies, such as those analyzing road and rail projects, to highlight that many projects suffer from systematic cost underestimation and a lack of economic viability, often failing to generate the promised benefits.

What is the author's primary conclusion regarding the BRI?

The author concludes that the BRI is currently largely driven by China's own economic interests—such as exporting industrial overcapacity—rather than by altruistic development goals, and poses significant financial risks to smaller participating countries through debt accumulation.