Building BRI Infrastructure to Drive Common Development

In the past decade, China has deepened its involvement in the development of infrastructure in BRI countries, with a growing number of Chinese companies involved in BRI projects. According to China’s Ministry of Commerce, from the launch of BRI in 2013 to 2021, the annual value of newly signed contracts of BRI projects by Chinese companies increased from US $72.3 bn to US $134 bn. Within this period, the total value of newly signed contracts of BRI projects by Chinese companies reached US $1.1 trn, accounting for around 51% of the total value of newly signed contracts of foreign projects by Chinese companies. Chinese engineering contractors are already internationally competitive. According to Engineering News-Record (ENR), the proportion of Chinese companies in ENR’s Top 250 International Contractors rose from 13% in 2012 to 28% in 2021 in terms of total turnover. In 2021, Chinese companies among the ENR Top 250 International Contractors had a market share of 59% in Asia (by turnover), 55% in Africa, and 40% in the Middle East. Sustainability is the prerequisite for promoting the high-quality development of the BRI, and for infrastructure construction, sustainability not only includes economic benefits, but also policy communication and improving people’s quality of life. China’s engagement in BRI infrastructure projects usually takes three forms, i.e., contractual cooperation, investment, and operation. Projects under the contractual cooperation model could be profitable, but the economic performance of different projects under the investment and operation models could diverge. For example, some BRI power grid projects have higher investment returns than domestic ones, while investment returns from some projects with high risks miss expectations. Transportation infrastructure projects generally have long payback periods, but they are important for improving connectivity within regions, people’s quality of life, and policy communication (e.g., Jakarta-Bandung High-Speed Railway). To address the challenges for the sustainable development of BRI infrastructure projects, cooperation and competition (“co-opetition”) among companies can be encouraged, and the supporting industries and infrastructure can also be improved. This could facilitate project implementation, boding well for the achievement of inclusive, high-quality development that improves people’s quality of life and increases economic benefits. We believe the following measures can be taken to improve the sustainability of BRI projects: First, channeling resources to high-quality projects and focusing on the development of sustainable projects that improve people’s quality of life. Second, building a development mechanism that combines guidance from the government with coordination and cooperation among companies. Third, improving capabilities of existing insurance institutions and facilitating the diversification of financing channels, e.g., strengthening the insurance capabilities of China Export & Credit Insurance Corporation for overseas investment and promoting innovative financing models such as public–private partnership (PPP) and hybrid financing.