Connecting the Asia-Pacific: Australian participation in China’s regional infrastructure initiatives

Infrastructure Infrastructure funding Australia-China relations Foreign investment Belt and Road Initiative (BRI) World politics Asia-Pacific Australia China


  • Major ‘infrastructure gaps’ plague the Asia-Pacific region, constraining economic integration and undermining development efforts.
  • In 2013, China launched two new projects – the Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank (AIIB) – to lead regional efforts to plug these infrastructure gaps.
  • These projects pose a dilemma for Australian policymakers: How to actively participate in these important efforts, while managing a range of potential governance, institutional and geopolitical risks?
  • Australia should develop a coherent policy regarding engagement with Chinese-led infrastructure projects, which leverages its membership of the AIIB to manage this dilemma.
  • Importantly, China’s infrastructure initiatives are qualitatively differentiated. The BRI is a semi-formal set of guidelines for developing infrastructure bilaterally; whereas the AIIB is a multilateral institution that has adopted international best practices for project governance.
  • The AIIB provides a mechanism for Australia to actively participate in China’s infrastructure initiatives. The involvement of the AIIB in a project offers important ‘governance guarantees’ and can help manage perceived geopolitical risks.
  • Australia should also seek to lead the institutional development of the AIIB, by offering technical and financial support to its project preparation efforts. This will have the added benefit of improving economic ties with key partners in the region, including Indonesia, India and Vietnam.
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