Belt and Road Initiative

The Belt and Road Initiative is a foreign policy program of the Chinese government. Head of state Xi Jinping introduced it in 2013. At its core is a simple deal: China provides other countries with loans so they can build ports, roads, power plants, railways, or mobile networks. Construction is usually carried out by Chinese firms, and repayment takes place over decades. The German name is often “Neue Seidenstraße” (New Silk Road), after the ancient trade routes between China and Europe. Around 150 countries have since signed corresponding memoranda of understanding, most of them in Asia, Africa, and Latin America.

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At first glance, this sounds like concrete and steel, not technology. But since 2015 there has been an official branch called the “Digital Silk Road.” It covers fiber-optic cables, mobile networks, satellite navigation, data centers, and surveillance cameras. Whoever supplies these foundations helps determine which technology a country uses for decades to come.

This has concrete economic consequences. A country whose mobile network comes from a Chinese manufacturer also buys spare parts and software there. For European and American providers, this market is then effectively closed off. This is precisely why the US and China have been fighting for years over who builds out 5G networks in Africa, Southeast Asia, or Eastern Europe.

On top of that comes a political debate. Critics speak of a “debt trap”: countries take on loans they cannot repay and thereby become dependent. The port of Hambantota in Sri Lanka, which a Chinese company leased for 99 years in 2017, is frequently cited as an example. Researchers partly disagree with this interpretation and point to homegrown financial problems in the debtor countries. The truth varies depending on the project.

Loans, construction contracts, and the flow of money

The initiative is not a single pot of money. It is more of a label for many individual contracts. Chinese state banks such as the China Development Bank and the Export-Import Bank of China are primarily involved. They grant loans to governments or state-owned enterprises in partner countries.

A typical process looks like this: A country wants a railway line. A Chinese bank finances the construction, and a Chinese state-owned corporation carries it out. Materials and often labor come from China. The country repays the loan over twenty or thirty years, sometimes secured by raw materials or usage rights.

Estimates of the total volume vary widely, because many contracts are not made public. Common figures range between 800 billion and over one trillion US dollars since 2013. Since around 2020, the sums have dropped significantly. Beijing now speaks of “small and beautiful” projects instead of megaprojects. One reason is loans that are not being serviced.

The initiative in headlines and products

In everyday life, you rarely encounter the initiative directly, but it appears all the more often in the news. The port of Piraeus in Greece is majority-owned by a Chinese shipping company and is considered a showcase European project. Italy joined in 2019 as the only G7 country and withdrew again at the end of 2023. Both events were read as a gauge of China’s influence in Europe.

In the tech sector, the same names keep coming up: Huawei and ZTE in mobile networks, Hikvision and Dahua in cameras, Alibaba and Tencent in cloud services—that is, in computing power rented over the internet. When a city in Kenya or Ecuador introduces a system with cameras and facial recognition, the technology often comes from this ecosystem.

The West has launched counter-programs, such as the EU’s “Global Gateway” and the G7's “Partnership for Global Infrastructure and Investment.” Both promise billions for ports, power grids, and data cables. So when you read reports about undersea cables, 5G bans, or port stakes, it is usually about the same conflict: who builds the infrastructure on which the digital world runs?