Against the backdrop of anti-globalization rhetoric, this paper summarizes our joint book entitled Going Beyond Aid (Lin and Wang, 2017a) and discusses the prospects for development finance in the broad context of Belt and Road Initiative (BRI). Based on the New Structural Economics (Lin, 2010; 2011), here we focus on China’s demonstrated comparative advantages in infrastructure, e.g. in hydropower and high-speed railways (HSR). In addition, long-term orientation (LTO) and patient capital are latent comparative advantages that many Asian economies possess, and are critical for the Belt and Road Initiative. Only if these comparative advantages are utilized can these economies cooperate to potentially achieve win-win.

Using a Global Trade Analysis Project (GTAP) model, and China as the base for analytical comparison, this paper shows that there are significant economic benefits to China and the participating countries along all six Belt and Road Initiative (BRI) economic corridors. However, to maximize these benefits, the social and environmental risks need to be well managed. The analysis shows a clear sequencing in terms of priority corridors. Two corridors have minimal investments and immediate returns, two corridors have significant investments with huge returns, and two corridors have high investments with lower returns. Overall, the paper demonstrates that to ensure the sustainability of any BRI corridor development, there is a need to consider its costs and benefits from the economic, social and environmental perspectives.

The Belt and Road Initiative (BRI) aims to enhance connectivity and collaboration among 60 countries and beyond in Asia, Africa and Europe. Information and communications technology (ICT) is an indispensable component of the initiative, critical in providing fundamental communication channels for global financial transactions, trade exchanges and transport and energy connectivity, and socio cultural collaboration and scientific exchanges between people, organizations and countries along the BRI corridors. Previously constrained by infrastructure deficits in ICT, the Asia-Pacific region is accelerating its efforts to provide reliable and affordable broadband networks throughout the region, to contribute to successful implementation of the Sustainable Development Goals (SDG).

Within the BRI corridors, this study which has been undertaken as part of the research programme of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) on promoting regional economic cooperation and integration, focuses on the China-Central Asia Corridor (China, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan), giving attention to the sub-region’s specific challenges, namely limited international transit opportunities and an increase in bandwidth requirements that is expected to grow exponentially, as the fourth industrial evolution centered on automation and artificial intelligence gathers momentum. The sub-region is characterized as highly dependent on the ease and costs of connecting to neighboring countries for transit, as many countries in the sub-region are landlocked developing countries (LLDC). Because of the geographical features and other factors, the development potential of Central Asia and its integration into globalization, continues to be stymied by insufficient international bandwidth and high transit costs to access international links. Therefore, improved ICT connectivity in Central Asia through the BRI corridor could result in improved availability and affordability of broadband networks and services in the sub-region.

For the purpose of this study, a gap analysis is the methodology that underpins the proposed topology for the China-Central Asia Corridor. The analysis included examining the current state of the optic infrastructure, such as existing and planned fiber-optic networks, existing Internet Exchange Points (IXPs) and international gateways. The study also identifies the key factors that determine the desired future state of infrastructure deployment for the BRI initiative. A topology that consists of connecting Almaty (Kazakhstan) and Urumqi (China), as core nodes, is proposed based on a partial mesh topology. Over and above this core finding, the study concludes that digital infrastructure connectivity has a tendency of lagging behind the rapid opportunities evolving, and the study therefore advocates for sub-regional and regional approaches, including the BRI and Asia-Pacific Information Superhighway (AP-IS) in further expanding regional broadband networks. A key recommendation of the study is co-deployment of broadband infrastructure along passive infrastructure, as an additional cost effective means of achieving fast and affordable broadband connectivity for all.

The China-Pakistan Economic Corridor (CPEC) has been one of the most prominent components of the Belt and Road Initiative (BRI). Most of the discussion on CPEC has centered around the macroeconomic effects on the economy. However, research on the fine details of CPEC’s financing structure has not been conducted. This paper aims to fill the gap by providing a detailed description of the financing of CPEC and how the money maps on to different sectors of the Pakistani economy. We also discuss some macroeconomic concerns and ways to mitigate these risks.

China’s Belt and Road Initiative (BRI) hopes to deliver trillions of dollars in infrastructure financing to Asia, Europe, and Africa. If the initiative follows Chinese practices to date for infrastructure financing, which often entail lending to sovereign borrowers, then BRI raises the risk of debt distress in some borrower countries. This paper assesses the likelihood of debt problems in the 68 countries identified as potential BRI borrowers. We conclude that eight countries are at particular risk of debt distress based on an identified pipeline of project lending associated with BRI.

Because this indebtedness also suggests a higher concentration in debt owed to official and quasi-official Chinese creditors, we examine Chinese policies and practices related to sustainable financing and the management of debt problems in borrower countries. Based on this evidence, we offer recommendations to improve Chinese policy in these areas. The recommendations are offered to Chinese policymakers directly, as well as to BRI’s bilateral and multilateral partners, including the IMF and World Bank.