At the third Belt and Road Forum for International Cooperation (BRF) held on 17–18 October 2023 in Beijing, Chinese President Xi Jinping proposed eight action plans for the Belt and Road Initiative (BRI). Among his ideas, Xi pledged to create a secretariat for the BRF and to “strengthen the institutional building for international Belt and Road cooperation.”

The proposal, though short on detail, spotlights a fundamental problem with the BRI since its inception in 2013 — its lack of institutionalization. Without a set of established multilateral principles, the BRI has struggled with building predictability, transparency, and trust even while its business deals have proliferated across the world and membership expanded to over 150 countries.

These flaws were evident in the lead-up to the latest BRF. Although Xi announced that China would host the third BRF at the G20 meeting in November 2022, the dates and attendees were not finalized until days before the meeting, suggesting poor planning. The latest BRF was held with little fanfare, reflecting stalled momentum for the BRI.

No wonder Xi vowed to energize the BRI and the BRF through institutionalization. Establishing a secretariat to run the international conference should be an easy affair. But creating a genuinely multilateral institution governed by “generalized principles” for decision-making will be a difficult task.

Beijing has made it clear that the BRI follows a “top-level design” with Xi and the Chinese Communist Party central leadership setting the strategic direction.

Under the State Council, the Belt and Road Construction Leadership Group, headed by First Vice Premier Ding Xuexiang since 2023, coordinates the promotion of the BRI. The National Development and Reform Commission leads the implementation of the BRI in collaboration with the Ministry of Foreign Affairs and the Ministry of Commerce. The main funding platforms and participants were China’s policy banks, most notably the Export-Import Bank of China and the China Development Bank, along with centrally-controlled state enterprises.

The BRI built on the “interest communities” and “partnership diplomacy” that China had cultivated in the past, so naturally, the initiative was to be buttressed by economic interests and diplomatic ties between China and its partner states. With China at the center, cooperation was transactional and informal, based on negotiated reciprocity rather than established institutions or binding agreements.

China has touted the BRI’s top-level design as innovative compared to the Western-dominated Bretton Woods economic system. The Chinese approach first showcased its advantage by helping launch the program quickly, forgoing the cumbersome process of negotiations commonly associated with multilateral institution-building.

For supporters in and outside China, free of an entrenched bureaucracy and a set of stringent conditions, the BRI would streamline decision-making on loans and projects. Indeed, membership quickly expanded, just as business deals worth billions were inked in a short span.

But this approach has proven detrimental to BRI’s credibility as a public good for the world. Chinese economic actors along the BRI have contributed to a myriad of problems in Chinese investment such as poor funding decisions and uneven quality control over project constructions, lending support to criticism that BRI is but a Chinese scheme of neo-colonialismdebt traps, and global domination.

There are credible reports of widespread disorganized lending, hidden debt, and shady repayment deals favoring China over other creditors. Now the largest bilateral lender, China has participated in the G20 Debt Service Suspension Initiative and Common Framework for Debt Treatments. But the BRI’s top-down design has made it difficult to separate commercial from government loans. The BRI’s Chinese-style bilateralism belies Beijing’s notion that the BRI is not an alternative but a supplement to the Bretton Woods system.

A decade into the program, the tensions between the BRI’s bilateralism and the international cooperation it aspires to are too pronounced to ignore. The institutional limbo the BRI finds itself in may well be the Achilles heel in China’s attempt to build a sustainable, high-quality global program. In this context, Xi’s latest pledge to strengthen “multilateral cooperation platforms” across multiple sectors suggests a heightened awareness of the BRI’s institutional flaws and perhaps a new Chinese openness to addressing the issue.

Ceding control to embrace multilateral restraints goes against the grain of the original Chinese approach. Chinese analysts have so far offered few details on how to multilateralise the BRI; many have called for improving existing mechanisms to promote pragmatic cooperation.

A secretariat may soon be created to formalize the BRF. China may be more open to expanding bilateral cooperation and connectivity with more partners. But such tentative steps will be limited to specific issue areas, such as trade, transportation, the digital economy, and green technology.

The Asian Infrastructure Investment Bank (AIIB) might provide a template for BRI institutional reform. The AIIB was first conceived as a funding platform for the BRI but quickly turned into a multilateral development bank. But the AIIB fills a gaping need for infrastructural investment in Asia. The BRI has already partnered with the UN Development Program and there are many development-oriented institutions in place now. Thus, the BRI is unlikely to see a system-transforming institutionalization.

This article was originally published on the East Asia Forum.

Yong Deng is a professor of political science at the U.S. Naval Academy and the author of China’s Strategic Opportunity: Change and Revisionism in Chinese Foreign Policy.

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