China proposed the Belt and Road Initiative (BRI) in 2013 to improve connectivity and cooperation on a transcontinental scale.
Quantifying impacts for a project as vast as the BRI is a major challenge, which is why the World Bank Group conducted this independent analysis of the risks and opportunities of Belt and Road transport corridors. Supported by empirical research and rigorous economic modeling, Belt and Road Economics aims to help participating countries choose the kinds of investments and reforms that will best meet their development needs. The study also aims to inform the public debates surrounding BRI, by grounding the discussion in data and analysis.
Belt and Road transport corridors have the potential to substantially improve trade, foreign investment, and living conditions for citizens in its participating countries—but only if China and corridor economies adopt deeper policy reforms that increase transparency, expand trade, improve debt sustainability, and mitigate environmental, social, and corruption risks.
- Infrastructure and policy gaps in Belt and Road corridor economies hinder trade and foreign investment. New infrastructure can help close these gaps, but it is costly—and investments are occurring in the context of rising public debt.
- BRI transport projects can expand trade, increase foreign investment, and reduce poverty—by lowering trade costs. Yet, for some countries, the costs of new infrastructure could outweigh the gains.
- Complementary policy reforms can maximize the positive effects of BRI transport projects and ensure that the gains are widely shared. For some countries, reforms are precondition to having net gains from BRI transport projects.
- The BRI presents risks common to large infrastructure projects. These risks could be exacerbated by the limited transparency and openness of the initiative and the weak economic fundamentals and governance of several participating countries.