The Chinese belt and road initiative: development project with strings attached?

Abstract

Purpose This study aims to investigate how the Chinese Belt and Road Initiative (BRI) and Chinese outward foreign direct investments (FDI) impact the Belt and Road countries (BRCs). It draws on postcolonial theory to investigate the (geo)political objectives behind the financial and economic means. Design/methodology/approach In line with the nature of postcolonial studies, the study applies a discourse analysis integrating it with empirical data on indebtedness and trade. Findings This study finds that FDI and the BRI, as a development project, need to be considered a double-edged sword for the receiving countries. The authors provide evidence that China has instrumentalized financial and economic means to gain political influence and pursue geopolitical ambitions. Moreover, investments into sensitive sectors (e.g. energy, infrastructure), combined with the BRCs’ inability to pay back loans, could eventually lead to China gaining control of these assets. Research limitations/implications The study investigates the financial and economic means that are instrumentalized to gain political influence while not considering flows of technology and know-how. It also limits itself to the study of FDI coming from one specific country, i.e. China. Therefore, no comparison and evaluation are made of FDI from other countries, such as the USA or European countries. Practical implications By revealing noncommercial objectives and geopolitical ambitions that China pursues through the BRI, the authors derive policy implications for the BRCs, third countries and China. Originality/value The study contributes to postcolonial theory and neocolonialism by investigating how China uses financial and economic means to achieve noncommercial objectives and pursue geopolitical ambitions. Additionally, the authors enhance the understanding of FDI by highlighting more subtle aspects of the complex and contextual nature of FDI as a social phenomenon, which have been overlooked thus far. The authors challenge the predominant positive framing of FDI and provide a counterpoint to the way FDI is often coined.

Hegemon or South-South partner? The ambiguity of Chinese foreign direct investment in Peru

“…In this manner, China's OFDI has increasingly been discussed as a neo-colonial relationship. Chinese OFDI is steered principally by the Chinese state, and some argue that the BRI is driven by China's own geopolitical ambitions (Oberhauser, 2023). China has a policy towards Latin America as a region but has favoured bilateral over regional trade agreements, and its general approach has been to engage with both conservative and progressive regimes.…”