Construction work

Better planning, preparation and implementation can ensure high-quality Belt and Road cooperation

Since the launch of the Belt and Road Initiative, Asian countries have strengthened their cooperation on infrastructure building, expanding the scale and diversifying the models.

By the end of June 2023, China had signed more than 200 cooperation agreements with 152 countries and 32 international organizations under the framework of the initiative. China and its partners have initiated more than 20 dialogue and cooperation mechanisms in various areas, including roads, bridges, high-speed railways, hydropower, wind power and gas pipelines.

The connectivity of infrastructure, based on the framework of "six corridors, six routes, and multiple countries and ports", has effectively driven the growth of participating countries: the full launch of the China-Laos Railway has indirectly created more than 100,000 jobs in Laos; the China-Pakistan Economic Corridor has brought direct investment of $25.4 billion to Pakistan, creating 236,000 jobs; Chinese companies have worked with the governments and enterprises of partner countries to jointly build more than 70 overseas industrial parks, fueling the development of the China-Belarus Industrial Park and the Thai-Chinese Rayong Industrial Zone.

The BRI has brought new opportunities for future infrastructure cooperation in Asia. However, large-scale infrastructure projects often face challenges in terms of technology, funding, and management, which can be further escalated in the context of extensive international cooperation.

First, the layout of projects needs to be optimized. A poor layout can lead to issues such as disorderly and repetitive development. In terms of project models, although the PPP model (public-private partnership) and DBB model (design-bid-build) remain the mainstream choices, these conventional models do have limitations.

Second, the share of digital infrastructure cooperation remains low. Most Belt and Road projects involve conventional infrastructure, with a disproportionately high share of energy and transportation projects and low share of projects in the digital economy sector. Although the concept of the "Digital Silk Road" was proposed many years ago, the Belt and Road partner countries, most of which are developing economies, do not have sufficient digital technology capabilities to engage in relevant cooperation.

Third, project funding management needs to be improved. Impacted by the COVID-19 pandemic, some developing countries are struggling with economic stagnation, making it harder for them to repay debts. For example, China has received debt repayment extension requests from countries such as Pakistan, Ecuador, Angola and Zambia among others. Partner countries need to improve their capabilities to handle losses of funding due to such major emergencies.

To achieve high-quality cooperation, it is necessary to explore effective pathways to strengthen project assessment, promote digital infrastructure construction, and regulate project timelines and fund utilization.

First, the conditions of the partner country and the area of cooperation should be better assessed in advance. When selecting a partner, it is essential to consider the political stability of the host country, clarify the legal content of investment and construction, and understand the environment for construction, so as to minimize the challenges brought by differences in political and economic development situations. The area of cooperation should align with the development needs of the host country and should be tailored for countries at different stages of development: fast-growing countries may prefer infrastructure building such as transportation and energy, while countries pursuing their green transition are likely to prefer cooperation in energy conservation, environmental protection, high-tech industrial parks, and among others.

Second, cooperation in digital infrastructure building needs to be enhanced. It is necessary to continuously assist partner countries to expand broadband access, improve important digital infrastructure, including communication, the internet, and satellite navigation, promote broadband network coverage, and enhance service capacity and quality. Starting from the cooperation project, digital technologies should be used in building conventional infrastructure, improving the digital skills of the workforce, enhancing public digital literacy, and advancing local transformation toward digital, internet-based and intelligent industries.

Third, project timelines and fund utilization should be better planned. There should be better planning of the total budget, construction materials, and a timeline drawn up for each stage of construction, aiming to control costs while ensuring construction quality, and avoid the waste of funding. Risk identification and assessment throughout project life cycle should also be mandatory and done properly. Moreover, it is important to determine the most suitable project model based on the public/private nature of project funding, scale, technical complexity, duration and so on, and continuously innovate the traditional engineering procurement construction and public-private partnership models.

The author is director of the Institute for the US and Canadian Economies of Wuhan University. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn