The Belt and Road Initiative: Implications for China's Foreign Aid

Abstract

Abstract:This article discusses the impact of the Belt and Road Initiative (BRI) on China's foreign aid provision by analysing the ensuing transformation and challenges. With regard to transformation, impacts are evident in the increased significance of this aid in China's overall diplomatic project, the changes in development financing arrangements, the long-term vision in planning infrastructure engagement, and the shift towards multilateral cooperation and soft aid programmes. While the BRI has reshaped China's foreign aid in many aspects, the initiative has also posed challenges to the organisation and delivery of aid. The lack of transparency and the fragmented institutional arrangement of China's foreign aid are likely to limit the effectiveness of its aid engagement abroad. The rapid increase in lending to developing countries also raises the debt trap issue and discourse. Moreover, China faces challenges in engaging in partnerships with civil society groups and local communities in the host countries where "soft" programmes of cultural exchange and people-to-people connections are made. The article argues that the BRI is a double-edged sword, representing new opportunities for China's foreign aid while also posing challenges.