This piece was updated on November 5, 2020 with corrected codings regarding a country’s bilateral accord type. The analysis shifted accordingly to focus on the distinctions between Belt and Road Initiative participants versus non-participants.
As a global campaign to promote international trade, investment, and infrastructure connectivity, China’s Belt and Road Initiative (BRI) has made headlines since its launch in 2013. Countries located along the BRI’s corridors, including China, account for one-third of the world’s trade and gross domestic product (GDP) and nearly two-thirds of its population.1 As the BRI’s geographic scope continues to grow, countries must decide whether to join — and to what extent they should participate. As of January 2020, 138 countries have signed on to the BRI, ranging from Italy to Saudi Arabia to Cambodia.2 BRI participants span the globe, although significant regional variation exists: overall participation levels are highest in Central Asia and Africa, lower in Europe and Latin America, and non-existent in North America.
However, BRI participants are not all created equal. When countries sign up, some ink a memorandum of understanding (MoU) with China, while others conclude a cooperation agreement. A MoU is the highest level of agreement for parties to the BRI. MoUs typically contain more specific provisions, such as details about particular projects to be developed with Chinese investment. In contrast, cooperation agreements have more general terms and may simply express a shared intent to collaborate in the context of the BRI. While some countries have converted their bilateral accords with China from cooperation agreements to MoUs, there are no examples of the opposite occurring, further demonstrating that a MoU represents an upgrade in BRI participation from a cooperation agreement.
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Identifying which countries are not in the BRI is just as important as pinpointing those that are. As of January 2020, 57 countries have not joined the BRI. In addition to the United States and Canada in North America, most of these countries are clustered in Europe and Latin America, with smaller numbers found in Asia and Africa. Even though BRI participation promises significant economic benefits, concerns persist about debt traps, corruption, security concerns related to Chinese investment, and ongoing territorial conflicts such as in the South China Sea and the China-India border.3 Yet several U.S.-aligned countries have bucked overall regional trends and joined the BRI, such as Italy, South Korea, and New Zealand.4 Figure 1 below summarizes variation in BRI participation levels.
Figure 1: Variation in BRI Participation by Country
What are the attributes of countries that join the BRI through cooperation agreements versus MoUs — and those that eschew it entirely? Non-BRI participant countries are most likely to be in Europe, North America, or Latin America and the Caribbean. They have the highest percentage of collective defense agreements with the United States and are the most democratic, most politically stable, and most economically developed. Of the countries that have signed a cooperation agreement with China to participate in the BRI, fully half are in sub-Saharan Africa. These states have the fewest collective defense agreements with the United States and are the least democratic, least politically stable, and least economically developed. Countries that have inked MoUs to join the BRI are the largest group. Most of these MoU countries are in Asia. They have fewer collective defense agreements with the United States than non-BRI participant countries, but more than cooperation agreement countries. MoU countries are less democratic, politically stable, and economically developed than non-BRI participant countries, but more so than cooperation agreement countries. Figure 2 and Table 1 below summarize key characteristics of MoU, cooperation agreement, and non-BRI participant countries.
Table 1: Attributes of BRI and Non-BRI Participant Countries
|Upper Middle Income||30%||28%|
|Lower Middle Income||29%||12%|
|Collective Defense Agreement w/ U.S.||24%||40%|
|Number of Countries||138||57|
Note: A higher Democracy Index score indicates more democratic; a higher Political Stability score indicates greater instability.
Sources: World Bank Country and Lending Groups (2019), United States Department of State – United States Collective Defense Arrangements (2017), The Economist Intelligence Unit – Democracy Index (2020), The Fund for Peace – Fragile States Index (2019)5
These patterns reveal that breadth of the BRI is as much a priority for China as depth. The large number of states that have signed cooperation agreements but not MoUs suggests a “waiting room” phenomenon: Beijing wants to bring countries into the initiative to enhance its scope and prestige, but has yet to upgrade bilateral commitments. Such variation in participation levels illuminates China’s strategic goals for the BRI and its future development trajectory. Specifically, it reveals that China has prioritized its neighbors in Asia and states that are relatively more economically developed, politically stable, and democratic. At the same time, however, the attributes of non-BRI participant countries — the most economically developed, politically stable, and closely aligned with the United States — suggest that BRI expansion may slow in the future even as upgrading of participation levels within it continue.
The U.S. government has consistently been skeptical, if not openly critical, of the BRI. The United States has urged allies not to join the BRI, giving some countries the impression of a choice between the United States or China.6 Since 2013, analysts have variously described the BRI as China’s grand strategy to alter post-war American hegemony, rewrite international trade rules, and tilt U.S. allies toward China.7 Trump administration officials have taken an increasingly combative stance against the BRI. In 2017, then-Defense Secretary James Mattis stated: “I think in a globalized world, there are many belts and many roads, and no one nation should put itself into a position of dictating ‘One Belt, One Road.’”8 Yet while U.S. officials continue to view the BRI in opposition to American interests, others argue that the United States should support the BRI to steer it in a direction that benefits both countries and advances shared international development goals.9 While it remains extremely unlikely that the United States will join the BRI, the outcome of the 2020 U.S. presidential election may well prompt a reorientation of U.S. strategy towards the initiative.
Today, the ongoing COVID-19 crisis is also reshaping the BRI. Many BRI participant countries are diverting attention and resources towards urgent public health and welfare needs, hindering their ability to repay debts to China.10 It also remains to be seen whether China will still be willing to finance BRI projects that the pandemic has rendered commercially questionable or even inviable. China’s Ministry of Foreign Affairs announced in June 2020 that a fifth of BRI projects have already been “seriously affected” by COVID-19.11 Others, such as former People’s Bank of China governor Zhou Xiaochuan, portray COVID-19 as an opportunity for China to raise more BRI funding and optimize existing financing arrangements.12 Yet project delays and disruption due to border restrictions, supply chain turmoil, and financing issues suggest the BRI may be headed for a serious long-term slowdown. And while China’s expressed political commitment to the initiative remains strong, its primary focus will be reviving its own economy and preventing the virus’s domestic return.13
Looking to the future, Beijing’s use of cooperation agreements and MoUs highlights its pragmatic diplomatic approach toward cultivating political ties and commercial opportunity. China has long embraced “soft law”: quasi-legal instruments like cooperation agreements and MoUs that formally affirm commitment and cooperative intent but are not legally binding.14 Soft law appeals to both China and participant countries because it avoids codifying concrete obligations. Instead, soft law enables each side to flexibly tailor commitments based on circumstances particular to a given time and place. Such flexibility may become even more important in the future, as COVID-19 continues to slow global growth and limit governmental resources.15 If China succeeds in reviving its economy while other states struggle to restart theirs, then joining the BRI or upgrading participation could become more desirable — despite continued U.S. criticism of the initiative.
- Michele Ruta, “Three opportunities and three risks of the Belt and Road Initiative,” The World Bank, May 4, 2018, https://blogs.worldbank.org/trade/three-opportunities-and-three-risks-belt-and-road-initiative.
- Liu Meng, “一同中国签订共建‘一带一路’合作文件的国家一览” [ A list of the countries that have signed cooperation documents with China to jointly build the Belt and Road], 中国一带一路网 [Belt and Road Portal], https://www.yidaiyilu.gov.cn/xwzx/roll/77298.htm.
- Lucy Hornby, “Belt and Road debt trap accusations hound China as it hosts forum,” Financial Times, April 23, 2019, https://www.ft.com/content/3e9a0266-6500-11e9-9adc-98bf1d35a056; Elaine K. Dezenski, “Below the Belt and Road: Corruption and Illicit Dealings in China’s Global Infrastructure,” (Washington, DC: Foundation for Defense of Democracies, May 6, 2020), https://www.fdd.org/analysis/2020/05/04/below-the-belt-and-road/; Jodi Klein, “US national security concerns return to spotlight with new investment rules,” South China Morning Post, February 14, 2020, https://www.scmp.com/tech/science-research/article/3050563/national-security-concerns-return-spotlight-new-investment; “China-India border dispute: Its origins and impact,” South China Morning Post, July 30, 2020, https://www.scmp.com/news/china/diplomacy/article/3094884/china-india-border-dispute-its-origins-and-impact.
- Michael Schuman, “The U.S. Can’t Make Allies Take Sides Over China,” The Atlantic, April 25, 2019, https://www.theatlantic.com/international/archive/2019/04/us-allies-washington-china-belt-road/587902/; John Power, “What does South Korea think of China’s Belt and Road? It’s complicated,” South China Morning Post, June 1, 2019, https://www.scmp.com/news/asia/southeast-asia/article/3012713/what-does-south-korea-think-chinas-belt-and-road-its; Anna Fifield, “Under Jacinda Ardern, New Zealand pivots on how to deal with China,” The Washington Post, July 6, 2020, https://www.washingtonpost.com/world/asia_pacific/china-new-zealand-jacinda-ardern-xi-jinping/2020/07/05/f8d5e182-af95-11ea-98b5-279a6479a1e4_story.html.
- “World bank country and lending groups,” The World Bank, July 1, 2019, https://blogs.worldbank.org/opendata/new-country-classifications-income-level-2019-2020; “U.S. collective defense agreements,” U.S. Department of State, 2017, https://2009-2017.state.gov/s/l/treaty/collectivedefense//index.htm; “Democracy index 2019,” The Economist Intelligence Unit, 2020, https://www.eiu.com/topic/democracy-index; “Fragile states index 2019,” The Fund for Peace, April 10, 2019, https://fundforpeace.org/2019/04/10/fragile-states-index-2019/.
- Jonathan Stromseth, “Don’t make us choose: Southeast Asia in the throes of US-China rivalry,” (Washington, DC: The Brookings Institution, April 10, 2020), https://www.brookings.edu/research/dont-make-us-choose-southeast-asia-in-the-throes-of-us-china-rivalry/.
- Thomas Cavanna, “What does China’s Belt and Road Initiative mean for US grand strategy?” The Diplomat, June 5, 2018, https://thediplomat.com/2018/06/what-does-chinas-belt-and-road-initiative-mean-for-us-grand-strategy/; “China’s Xi seeks to rewrite global trade rules as US retreats,” INQUIRER.net, May 16, 2017, https://newsinfo.inquirer.net/897003/chinas-xi-seeks-to-rewrite-global-trade-rules-as-us-retreats; Michael Schuman, “The U.S. Can’t Make Allies Take Sides Over China.”
- “Many Belts and Many Roads,” Reconnecting Asia, Center for Strategic and International Studies, October 11, 2017, https://reconnectingasia.csis.org/analysis/entries/many-belts-and-many-roads/.
- Parag Khanna, “Washington is dismissing China’s Belt and Road. That’s a huge strategic mistake.,” Politico Magazine, April 30, 2019, https://www.politico.com/magazine/story/2019/04/30/washington-is-dismissing-chinas-belt-and-road-thats-a-huge-strategic-mistake-226759.
- Yufan Huang and Deborah Brautigam, “Putting a dollar amount on China’s loans to the developing world,” The Diplomat, June 27, 2020, https://thediplomat.com/2020/06/putting-a-dollar-amount-on-chinas-loans-to-the-developing-world/.
- “How coronavirus has affected China’s Belt and Road plans,” Al Jazeera, June 19, 2020, https://www.aljazeera.com/ajimpact/coronavirus-affected-china-belt-road-plans-200619045645222.html.
- Frank Tang, “Virus just a blip for China’s Belt and Road, says Ex-Central Bank Chief,” South China Morning Post, June 22, 2020, https://www.scmp.com/economy/global-economy/article/3090071/coronavirus-only-blip-chinas-belt-and-road-plan-says-former.
- “President Xi sends message to conference on Belt and Road Int’l Cooperation,” Xinhua, June 19, 2020, http://www.xinhuanet.com/english/2020-06/19/c_139149835.htm; Jevans Nyabiage, “Pandemic takes the shine off China’s Belt and Road Initiative in Africa,” South China Morning Post, June 28, 2020, https://www.scmp.com/news/china/diplomacy/article/3090850/pandemic-takes-shine-chinas-belt-and-road-initiative-african.
- Heng Wang, “China’s Approach to the Belt and Road Initiative: Scope, Character and Sustainability,” Journal of International Economic Law 22, no. 1 (March 2019): 29-55, https://academic.oup.com/jiel/article/22/1/29/5272447.
- Maria Abi-habib and Keith Bradsher, “Poor countries borrowed billions from China. They can’t pay it back.,” The New York Times, May 18, 2020, https://www.nytimes.com/2020/05/18/business/china-loans-coronavirus-belt-road.html.