The Belt and Road Initiative: What Is in It for China?

Asia & the Pacific Policy Studies, Volume 6, Issue 1, January 2019

Crawford School Research Paper

19 Pages Posted: 22 Feb 2019

Date Written: October 31, 2018

Abstract

China's outbound investment exceeded inbound investment for the first time in 2015. In years leading up this transition, a maturing demographic transition alongside slowing internal migration and diminishing returns to physical capital investment, all had a role in China's diminished competitiveness in low‐wage manufactured exports and the fading of the related growth model. In that context, the 2013 launch of the Belt and Road Initiative (BRI) took place in two stages in two developing countries, Kazakhstan and Indonesia. These launch choices, and the BRI in general are herein elaborated in terms of economic history, geography, and demography. The BRI in turn is considered to be aiming to foster the ongoing development of China, and in doing so also seeks to instigate new era development opportunity for other developing countries. One facilitation channel for the latter is China's concept of “patient capital,” essentially concessional capital, or foreign aid. For China that offers a means via which to internationalise the financial sector and also the Renminbi. Lessons from China's own use of foreign aid and economic development hence serve as an important reference for ongoing scoping of the shape and trajectory of the BRI. To that end, this article sheds light on what is in the BRI for China.

Keywords: Belt and Road Initiative, China, development, economic demography, RMB internationalisation

Suggested Citation

Johnston, Lauren A, The Belt and Road Initiative: What Is in It for China? (October 31, 2018). Asia & the Pacific Policy Studies, Volume 6, Issue 1, January 2019, Crawford School Research Paper , Available at SSRN: https://ssrn.com/abstract=3339685

Lauren A Johnston (Contact Author)

SOAS University of London ( email )

SOAS University of London 10 Thornhaugh Street, Ru
London, WC1H 0XG
United Kingdom

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