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(Gulshan Khan)

China has never spared any effort to portray its Belt and Road Initiative, a grand, trillion-dollar-plus global investment plan, as a positive vision for the world. Last year, China released cringeworthy videos featuring children who were, somewhat unrealistically, excited by the idea of infrastructure investment.

“The future’s coming now,” a group of children sang in one clip. “The Belt and Road is how.”

But not everyone is convinced that Belt and Road is such a great plan — either for China or the countries in which it’s investing. And with Malaysia announcing Tuesday that it has shelved two major infrastructure projects being built by Chinese companies because of high costs, many more leaders around the world may be wondering whether Chinese investment is a good deal.

It may be simpler to start with a more basic question: What is the Belt and Road? Given the vague way that Beijing has described the program, it’s hard to find an answer. Many have found it easier to think of the initiative in terms of its scale and ambition: Beijing has called it the “project of the century,” while others have compared it to the Marshall Plan, Washington’s stimulus package for a war-ravaged Europe (though the Belt and Road is many times bigger).


Workers stand on a container as cranes operate at the One Galle Face project developed by China Harbour Engineering Co. in Colombo, Sri Lanka. (Atul Loke/Bloomberg News)

It’s not a single thing, but rather a catchall term for investments in more than 60 countries around the world. The purported aim of that network is to better connect China with its trading partners. In practice, it usually involves getting foreign countries to take out large loans from China to build vast infrastructure projects, which are then typically built by Chinese companies.

All of that is quite obviously in China’s interests. In the short term, it’s able to use some of its excess industrial capacity abroad as its own economy slows. In the longer term, it could help internationalize Chinese companies and give Beijing a critical role in how global trade operates.

There’s also a powerful political motive: A Pentagon report released last week said China was trying to “develop strong economic ties with other countries, shape their interests to align with China’s, and deter confrontation or criticism of China’s approach to sensitive issues.”

Even so, many foreign partners were eager to sign up for the Belt and Road — largely because the loans tend to come with far fewer restrictions than those from Western countries.

But Malaysia’s decision shows how the plan can come apart. For one thing, Belt and Road projects have sometimes made no economic sense. In Sri Lanka, China poured money into an airport designed to handle 1 million passengers a year. Now it has been dubbed the world’s emptiest international airport. “Business is so slow that the airport has made more money from renting out the unused cargo terminals for rice storage than from flight-related activities,” wrote Bangkok-based writer Brook Larmer.

Another Belt and Road project in Sri Lanka, a deepwater port, is now in the hands of a state-owned Chinese company on a 99-year lease after it failed to attract enough business to make its loan payments. This could swell into a bigger problem: A study released by the Center for Global Development in March suggested that Djibouti, Kyrgyzstan, Laos, Maldives, Mongolia, Montenegro, Pakistan and Tajikistan would also struggle to repay Chinese Belt and Road loans.

To critics, this is a feature of China’s plan, not a bug. China, they say, is planning to bully smaller countries with “debt diplomacy” — and some even go further, suggesting that perhaps the plan is for China’s military to make use of all these belts and roads one day in the future. (It should be noted, however, that debt-fueled projects that make no commercial sense can be carried out within China, as well.)

What’s certainly clear is that the ambiguity of the Belt and Road is a major concern for its current and prospective participants. Beijing doesn’t release a central list of projects or the funding they’ve been given, and key parts of the process — such as bidding on contracts — are generally kept opaque. In Malaysia, where the deals were cut under former prime minister Najib Razak, officials now say they were made to bail out a Malaysian state investment fund plagued by graft. Najib left office in May and was arrested in July on corruption-related charges.

The Belt and Road still has its admirers. Experts have pointed toward some projects, such as an oil pipeline in Myanmar and rail networks in Kenya, that seem to be worthy capital investments. And countries will certainly come knocking on Beijing’s door as long as there’s easy money to be had. Turkey, in the middle of an economic downturn and a dispute with Washington, may be next.

But Malaysia’s high-profile decision to back out of projects shows how quickly the tide can turn against China’s vision. Indeed, to many, Beijing’s dream of a new future is starting to look uncomfortably like nightmares of the past. “We do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries,” Malaysian Prime Minister Mahathir Mohamad said at a Monday news conference in Beijing.

The discontent may come from within China, too. A string of defaults on Belt and Road loans could cause Beijing fiscal problems, and risky loans to foreign countries are now a tougher sell for President Xi Jinping as the domestic economy faces its own issues. If a serious downturn hits while China is showering cash on projects abroad, Bloomberg News’s Shuli Ren warns, “you can expect a revolt.”

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Correction: An earlier version of this article said that Najib Razak was linked to a Chinese state investment fund. The fund, known as 1MDB, was in fact run by the Malaysian state.