In 2016, ‘Belt and Road’ was among the most frequently-used buzzwords in Chinese media, a term strongly correlated to the topics mentioned. The Belt and Road Initiative, formerly One Belt, One Road, symbolizes how the lion intends to shake the world. In his speech at the Word Economic Forum in Davos in January 2017, the leader of the Communist Party of China (CCP), Mr. Xi Jinping emphatically advocated a liberal economic globalisation, environmental sustainability and abolition of protectionism. According to him, China will be a spearhead in defending economic globalization and promoting global economic development and opening-up. At the end of his speech, the president referred to the Belt and Road Initiative (BRI) which was launched in 2013 and pursues the goals of fostering cooperation, economic development and prosperity for all participating countries in a win-win manner. This initiative aims at nothing less than connecting Asia with Africa and Europe by establishing far-spreading transport infrastructure networks via land and sea, fostering trade, boosting economic integration and increasing cultural exchange.
Since its launch it has attracted much attention, especially concerning its political implications and obstacles. Besides these political discussions, figures of projects usually worth billions of dollars are circulating; yet, there are no papers examining the initiative based on economic theories and specifically focusing on the initiative’s true capability to increase economic development in participating countries. The common assessment is that huge transport and other infrastructure projects are beneficial for developing countries as they may boost trade and economic growth.
However, this simplistic assumption should not be accepted without evidence, as unproductive investments can have a huge negative impact on these economies; thus, this thesis will take a deeper look at the BRI’s economic characteristics and compare them to economic development theories as well as theories about the correlation of economic growth and transport infrastructure investments. In this way, it intends to clarify the potential impact on participating countries’ economic development.
Inhaltsverzeichnis (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
- 3.1 Contributing factors to the emergence of 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
- 4.2.1 Transport infrastructure's influence on economic growth
- 4.1 BRI influence on economic development
- 5 Conclusion
- 6 Limitations and further research
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This Master's thesis analyzes the economic impact of China's Belt and Road Initiative (BRI) on participating countries. It aims to evaluate the BRI's influence on economic development and growth in these countries, considering the initiative's motivations, financing mechanisms, and potential risks.
- The emergence and evolution of the Belt and Road Initiative.
- China's motivations and objectives behind the BRI.
- The impact of BRI infrastructure development on economic growth.
- Challenges and risks associated with the implementation of the BRI.
- The role of the BRI in fostering economic development and regional integration.
Zusammenfassung der Kapitel (Chapter Summaries)
Chapter 1 introduces the research topic, outlining the objectives and scope of the thesis. It explains the significance of the BRI in the context of global economic development and China's growing role in the world.
Chapter 2 discusses the research methodology employed in the study. It clarifies the theoretical framework, data sources, and analytical techniques used to examine the BRI's impact on participating countries.
Chapter 3 provides a detailed analysis of the Belt and Road Initiative itself. It explores the historical context, key objectives, implementation strategies, and financing mechanisms of the BRI, including the role of institutions like the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund. This chapter also delves into the economic motivations behind the BRI, such as China's desire to develop its western provinces, address overcapacity in its manufacturing sector, and promote the internationalization of its currency.
Chapter 4 examines the specific ways in which the BRI influences economic development and growth in participating countries. It focuses on the role of infrastructure development, particularly transport infrastructure, in driving economic growth. This chapter also explores the theoretical frameworks underpinning economic development, discussing concepts like coordination failure, the big push theory, and the impact of infrastructure investment on productivity and competitiveness.
Schlüsselwörter (Keywords)
Belt and Road Initiative, China, Economic Development, Economic Growth, Infrastructure, Transport Infrastructure, Asian Infrastructure Investment Bank (AIIB), Silk Road Fund, Overcapacity, Renminbi Internationalisation, Regional Integration, Development Theories, Coordination Failure, Big Push Theory.
- Quote paper
- Johannes Gmeiner (Author), 2017, Economic globalization with Chinese characteristics, Munich, GRIN Verlag, https://www.grin.com/document/438751
