In the second issue of Carnegie China’s China Through a SEA Lens series, scholars from eight Southeast Asian countries provide their takes on the impact of China’s Belt and Road Initiative (BRI) in their countries for the past decade. They choose from among five levels of impact: very positive, positive, neutral, negative, or very negative. Below are their responses.
A decade ago, when President Xi Jinping introduced the BRI, Thailand was among its primary supporters. This enthusiasm was partly due to Thailand’s closer ties with China following the 2014 military coup. Beijing’s commitment to the non-interference principle meant that its engagement with Thailand’s military regime became an implicit political endorsement.
The scope of BRI projects is vast, making it challenging to pinpoint which ones are formally associated with the BRI, aside from the notable Thai-Chinese high-speed railway project. The initiative’s projects range from infrastructure development, special economic zones, to promoting cultural activities.
However, there have been persistent concerns in Thailand about the financial viability of some BRI projects and the potential for the country to fall into a “debt trap,” as seen in other BRI partner nations. The terms of loans and concerns about sovereignty were critical discussion points. These issues caused a prolonged discussion and negotiations between Thailand and China on the high-speed railway project before the Thai government decided to finance the rail with domestic funds. At the same time, China was granted a concession to construct the tracks and operate the train.
Environmental concerns also accompany large infrastructure projects like high-speed railways. There have been worries about the ecological impact of some BRI projects in Thailand, especially in sensitive areas, mainly due to deforestation and community displacement. The construction of the high-speed railway, especially near the ancient city of Ayutthaya, has raised concerns regarding the potential physical and visual damage to historical sites. Many worry that constructing the elevated track and station near certain ancient sites might risk UNESCO delisting Ayutthaya as a World Heritage Site.
Overall, BRI projects in Thailand over the past ten years have yielded both noteworthy opportunities and challenges, and the impact of these projects and associated activities in Thailand has been positive. These projects have helped fortify Thailand’s economic relationship with China, thereby enhancing the country’s economic growth and solidifying its role as a regional hub. Nonetheless, issues such as trade deficits, environmental implications, and community impact remain significant areas of concern.
Although most of the projects are ongoing, the prominence of the BRI is expected to wane as China faces an economic downturn. China’s new Global Development Initiative (GDI)—which will emphasize pandemic response, food security, and the digital economy—will likely be central to Thai-Chinese cooperation in the future. The GDI complements Thailand’s drive to upgrade its economy by promoting investment in high-tech, digital, and green industries.
Thailand’s political and economic elites generally welcome China’s economic role in the kingdom. They see its role as beneficial to Thailand’s economic development, thereby buttressing the government’s political legitimacy.
BRI projects depend on the political calculus of the administration in power. While the Philippines officially joined the BRI during the presidency of Benigno Aquino III, the government did not pursue any major BRI projects at that time—at most, engineering, procurement and some construction contracts between Chinese firms and Philippine conglomerates. Aquino III capitalized on contracting Philippine projects to local oligarchs, who would have been marginalized had he invited Chinese firms.
In contrast, large-scale BRI projects were only agreed upon and implemented during the administration of Rodrigo Duterte. BRI brought development finance for the Chico River Pump Irrigation Project and the New Centennial Dam, as well as state-facilitated direct investments, such as Ant Financials’ joint venture with Globe Telecom to form Mynt, and the Mindanao Islamic Telephone Company partnership with China Telecommunications to launch Dito Telecommunity. Duterte used these projects to strengthen his elite networks. When President Bongbong Marcos became president in 2022, he canceled the three early-stage railway projects in Luzon and Mindanao. Marcos has yet to agree to any new BRI projects.
BRI projects have benefited a select number of Philippine government-sponsored elites. During Duterte’s time, the Chico River Pump Irrigation project served the Cagayan elites. The New Centennial Dam was designed to help the population of the National Capital Region and the Philippine Army. Dito Telecommunity helped Dennis Uy. And Mynt benefited the Ayala family.
While the Philippines has economically benefited from the construction activities and local employment, these large-scale BRI projects have not altered the Philippine economy toward a more robust and long-term developmental model. Chinese medium-sized enterprises in services, which have indirectly benefited the most from BRI, have become joint venture partners to Philippine businesses. However, services are already the strongest sector in the Philippines, meaning that investment, employment, and revenue gains will only marginally increase.
The BRI has also indirectly funneled so-called illicit Chinese capital in the Philippines. During Duterte’s administration, improved Philippine-China relations led to a better environment for private firms and people-to-people exchanges. Chinese foreign direct investment (FDI) increased in services, finances, real estate, wholesale and retail, and other sectors. However, many of these foreign firms and investors were directly and indirectly working with online gambling firms, which are criminal enterprises according to China. Online gambling investments reached its apex in 2019, resulting in 250-300 online gambling and service firms setting up shop and importing 500,000 legal and semilegal Chinese workers. As online gambling and other illicit sectors expanded, security concerns heightened around Chinese labor imports, hacking, economic infrastructure, and commercial transactions. Money laundering, sex work, and violence increased as Philippine government officials benefited from side payments. Since Marcos took office, many of these firms have left, but some still remain hidden in the cities and special economic zones.
Over the past decade, China has made massive investments in Indonesia through the BRI, spanning various sectors such as infrastructure and mining. The BRI framework has solidified China’s position as one of Indonesia’s largest trading partners. Evaluating whether the BRI has lived up to expectations involves two perspectives.
First, from an economic standpoint, Chinese investments have the potential to bolster Indonesia’s economic growth, particularly when directed toward infrastructure development. The Indonesian government’s priority is connecting Java Island to the eastern regions, which can significantly improve economic growth and regional connectivity. However, Indonesia’s growing reliance on Chinese investment may pose a risk to its economy, as increased Chinese investment may lead to rising debts. Presently, there are seventy-one BRI-related programs with a total valuation of $20.3 billion, and the government should be cautious to avoid falling into a debt-trap situation, like in Sri Lanka.
Second, social issues are hindering the BRI implementation. Certain BRI projects, such as the Morowali Industrial Park (IMIP) in Central Sulawesi, raise concerns about worker safety. The IMIP, which spans a 3,200-hectare site and produces 3 million tons of stainless steel, has experienced issues with misinformation regarding the influx of Chinese workers. This has resulted in tensions between Indonesian and Chinese workers, with recent racial tensions escalating and leading to the tragic deaths of one Chinese and one Indonesian worker. Such incidents highlight the necessity for both governments to closely monitor these projects and foster an atmosphere that prioritizes the safety and well-being of workers to prevent future incidents.
Currently, the Indonesian government is anticipating further Chinese investment in the new Indonesian capital city, named Nusantara (IKN), with a $32 billion contract, as well as the Rempang Island eco-city project valued at $11.5 billion. Both investments have their pros and cons. While IKN is crucial for Indonesia’s development, it raises concerns about overreliance on Beijing’s investment and potential anti-Chinese sentiments in Indonesia. As for the Rempang Island project, despite its promise to create 35,000 jobs, it requires the relocation of 7,500 indigenous people. This situation led to conflict between the local population and Indonesia government.
A decade of BRI projects in Indonesia has brought about positive impacts, but there are several areas that require improvement, including transparency, accountability, and risk management. These three aspects are crucial to ensure that investments benefit both the government and the people. Investments have expanded beyond highways, high-speed train projects, and mining industries, with the Indonesian government now anticipating Chinese investments in urban development. This aligns with President Joko Widodo’s ambition to accelerate the country’s infrastructure development. However, it is imperative to acknowledge that China’s massive investments carry potential risks that could affect Indonesia’s economy in the future. Furthermore, the social well-being of the Indonesian people must remain a top priority during these extensive projects, as it is the state’s duty to protect and ensure the safety of its citizens.
The tenth anniversary of the BRI is a significant milestone, demonstrating the success and fruitful cooperation between China and Cambodia. Since its establishment, the BRI has helped Cambodia develop and improve its infrastructure. Cambodia has been able to connect the capital city to the rural areas of the country, and the newly improved infrastructure has helped boost the local and national economy.
The BRI projects have focused on all types of infrastructure such as highway, roads, and bridges. One of the most notable projects is the Phnom Penh-Sihanoukville Expressway, which has reduced travel time for drivers from five to six hours down to two hours. The expressway has also facilitated the local tourism. People from the capital city can enjoy their short break over the weekend at the coastal city like Sihanoukville province. They can depart in the morning and return home in the evening. This just one-day round trip has encouraged thousands of people to visit Sihanoukville province.
BRI has also promoted the transnational transfer of money between China and Cambodia with the use of QR code technology. While this practice has encouraged cross-border trade, it has also pushed Chinese tourists to spend more money in Cambodia just by scanning the QR code and paying on their WeChat or Alipay.
The BRI has been progressive in its development approach. At the moment, the BRI projects have paid much attention to the high labour standards, skill transfer to the local workers, and green development. It is highly expected that more BRI projects will flow into Cambodia because Cambodia still has a high demand for physical infrastructure, particularly rural roads and bridges.
Moving forward, BRI projects in Cambodia need to take local voices into consideration; pay more attention to local and national governance, where corruption and abuses can be minimized; and create more green spaces by prioritizing forests, ponds, lakes, and rivers. Local job opportunities should be tailored to benefit the local community.
There are a few BRI projects in Vietnam. Many had been announced previously and later incorporated into BRI by China, including the Cát Linh – Hà Đông project (railway 2A) signed in 2008 and the Vĩnh Tân power station in 2007 (usually considered in Vietnam as co-funded projects by China rather than exclusively BRI). The number of listed projects by China has increased in the past ten years.
Officially, Vietnam welcomes BRI, with high-level leaders highlighting its potential. Recently, Prime Minister Phạm Minh Chính emphasized cooperation to ensure that the BRI is high-quality, and Minister of Planning and Investment Nguyễn Chí Dũng referred to Vietnam-China cooperation under the BRI as a “catalyst” for regional development. It is also worth noting these following distinctions in Vietnam’s official statements: (i) BRI is usually mentioned alongside the “Two Corridors, One Belt” (TCOB) framework proposed by Vietnam in 2004 (before BRI) and TCOB was cited in the 2017 MOU as a standalone initiative; (ii) some use the term “China’s ODA” or “China’s loans” instead of BRI; (iii) many highlight the need to make BRI high-quality, low-risk, serving regional common interests, and adhering to international law.
Views from other sectors, including academia or media, are more diverse. Some commend the BRI on its delivery of public goods and greater local revenues (especially related to the train project, which boasted twelve stations and 53 billion VND in revenue in 2021 and the first nine months of 2022). It is also considered a way for TCOB to meet Vietnam’s infrastructure needs and a tool to reduce bilateral political tension and carry out Vietnam’s “hedging” strategy. The BRI’s smaller scope of investment and lack of conditionality is one of its attractions. On the other hand, some cite economic problems such as slow progress, higher financial costs than expected, and non-transparent bidding processes. There are also political concerns raised from BRI projects in other countries, such as the risk of a debt trap, retaliation, and dual-use purposes of facilities. Finally, there are potential social issues such as environmental damage related to nonrenewable power plants, labor safety issues, and China’s possession of local assets.
Some contend that the BRI’s progress could be stalled because of the GDI and the Global Security Initiative (GSI), as well as its strategic rivalry with the United States. But the BRI is expected to continue and expand. As long as Xi is in power, the BRI will be considered a trademark of China’s foreign policy and a feature of China’s rise. China has made efforts to overcome the BRI’s limits, such as establishing channels to address local grievances and moving toward a greener BRI. Going forward, the BRI could be incorporated into other China’s initiatives, including the GDI and GSI.
Vietnam’s officials have also expressed desires for the BRI to be more transparent, win-win, and greener, as well as contribute to more balanced trade. They want Vietnam to be a center of connection. More technology transfer and higher level of investment are also critical. Except for the sky train and power plants, other potential areas in Vietnam for investment could be critical minerals and border linkages.
Hoàng Đỗ acknowledges the inputs of Nguyễn Đăng Dương & Nguyễn Nhật Linh from the East Sea Institute’s China Research Team.
Lao People’s Democratic Republic (Lao PDR) is an important BRI partner among ASEAN member states. By joining the Initiative, the country aims to improve its social and economic cooperation with China, enhance sustainable development goals, develop from a land-locked to a land-linked country, and provide various job opportunities, higher incomes, and better living standards to its people.
The first BRI infrastructure project, the Lao PDR–China Railway (LCR), began in 2016 and was completed in 2021. The mega-construction project cost approximately $6 billion and was built by Chinese state-owned contractors, which bore 70 percent of all construction costs. The railway line runs approximately 1,000 kilometers from Kunming City in China to Vientiane. The development of the railway increases international logistic networks and reduces transportation costs and time. It can generate positive economic returns, minimize trade costs, and serve as a key land transportation route in the Indo-China peninsulas. The LCR project has further strengthened and deepened the relationship between the two nations. The project serves as a significant strategic connection between the two countries, aligning it with the BRI as a component of the gradual implementation of the Laos-China Economic Corridor. The project is generating both direct and indirect benefits not only for Laos and China, but also for neighboring countries.
According to a report by the Laos-China Railway Company, the transportation of passengers and goods has seen significant growth, with “China’s Responsibility” serving as a catalyst for economic dynamism. From December 2021 to April 2022, the cumulative number of passengers transported was 14.43 million. As of May 2022, the aggregate volume of goods transported had surpassed 20 million metric tons. Of this, the cross-border freight volume exceeded 4 million tons, with a corresponding value of 17.7 billion yuan ($2.5 billion). In the first quarter of 2023, there was a significant year-on-year increase of 274.4 percent in the import and export freight volumes of the Laos-China Railway.
The Laos-China Railway serves as a symbol of prosperity, happiness, and friendship, showcasing the robust vitality and impact of the collaborative efforts in constructing the BRI. It stands as a tangible manifestation of the endeavor to establish a global community with a shared future for humanity.
International cooperation is considered as a significant strategy for Lao PDR to develop the country in different areas. Both parties can increase their cooperation in economic connectivity and political strength by implementing the BRI. Most importantly, the BRI can help turn Lao PDR from a land-locked country to a land-linked hub connecting Thailand, Cambodia, Malaysia, and Singapore.
China is an important trade and investment partner of Malaysia. While China has been Malaysia’s largest trade partner for fourteen consecutive years, its importance as an investment partner emerged only after the launch of the BRI in 2013. China’s share in total inward flows of FDI increased from a mere 0.8 percent in 2013 to 12.6 percent in 2016. It further increased to 17 percent in 2017 as investments from China increased while overall inward flows fell. China thus proved to be an important investment partner as investments from other countries dipped. China’s share reached a peak in 2019, at 27 percent, but subsequently fell to 4.9 percent in 2022 due to a rebound in FDI from other countries.
Human resource development from employee training is perceived to be the main contribution from seven case studies of BRI projects. These are namely: Malaysia-China Kuantan Industrial Park (MCKIP); Digital Free Trade Zone; D&Y Textile; Alliance Steel; Jinko’s solar investments in Penang; China Railway Rolling Stock Corp.’s Rolling Stock Center (CRCC) in Batu Gajah, Perak; and Geely’s automotive investments in Proton, the national auto company. The BRI also encompassed Huawei and ZTE's investments in the telecommunication sector as well as Longyi’s solar investments in Sarawak in East Malaysia. However, many Malaysians perceived the development of linkages with the domestic economy as sparse, since there was limited local sourcing of inputs for production. A recent survey on the social impact and community perceptions of two BRI projects in Malaysia, namely MCKIP and CRCC, found that the two projects were viewed positively in terms of job creation and stimulating the local economies. But there were also concerns over land rights, regulatory frameworks for joint ventures, labor rights and employment practices, public consultation, transparency and communication, community investment, as well as language and cultural issues.
Moving forward, there will be less need for investments in mega-infrastructure projects. Instead, Malaysia welcomes the shift in investments toward “small but beautiful projects,” especially for green and digital projects that are in line with Malaysia’s current priorities. This has already been expressed by Prime Minister Dato’ Seri Anwar Ibrahim in his meeting with Xi in March. Thus, Malaysia continues to welcome FDI from China in common sectors of interest for both countries. However, compliance with environmental, social, and governance standards will be increasingly important, as Malaysia is prioritizing sustainability concerns for all FDI projects in the country, regardless of the source of investment.
Since the BRI’s launch, Myanmar’s position has moved from diversifying dependence during the military-backed Union Development and Solidarity Party (USDP) administration from 2012 to 2016, to more positive albeit cautious support during the National League for Democracy (NLD) government from 2016 to 2021. After the February 2021 coup, the State Administration Council (SAC) military regime embraced the BRI, seeking to restart or accelerate projects stalled or delayed during the NLD’s term. In August, the SAC chairman mentioned the implementation of the railway for Kyaukphyu deep seaport project, a key feature of China’s infrastructure investments in Myanmar even before the BRI.
China’s BRI projects in Myanmar focus on hydropower, cross-border industrial zones, and connectivity, such as the high-speed railway networks and the Kyaukphyu deep seaport. These projects have grappled with delays, barring the Myanmar-China oil and gas pipeline that started operations in 2013. Delays are primarily attributed to concerns surrounding China’s perceived debt trap. The coronavirus pandemic added to the delays, though China has sought to restart some high-profile projects.
Though the USDP government did not reject the BRI, the launch was shadowed by Myanmar’s decision in 2011 to suspend the billion-dollar Myitsone dam project, which coincided with the USDP’s attempts to diversify its economic diplomacy as part of the overall political opening and economic liberalization. The NLD government was more receptive to the BRI, inaugurating the China-Myanmar Economic Corridor in 2017. In 2019, it signed thirty-three memoranda of understanding during Xi’s visit to Myanmar. The NLD government renegotiated several projects to safeguard against potential repercussions related to excessive foreign debt. The Myanmar public was concerned about environmental damage, land seizures, and forced relocations and the paucity of public consultations. But not all were opposed. The promise of jobs and access to international markets remains tempting, even more so after the 2021 coup.
Elite perceptions of the BRI were largely positive during the NLD administration. In the ISEAS-Yusof Ishak Institute’s 2019 State of Southeast Asia survey, Myanmar respondents viewed the initiative as providing necessary infrastructure development and were optimistic that the BRI would benefit the region and ASEAN-China relations. However, differing narratives and analyses of debt-trap diplomacy probably caused Myanmar respondents to request that their government proceed cautiously. The Myanmar respondents in 2020 expressed little or no confidence in the BRI’s new approach toward offering fairer deals. This continued and deepened after the 2021 coup. Myanmar respondents in 2021, 2022, and 2023 were concerned about China’s economic dominance and political influence.
Myanmar’s domestic politics shape attitudes toward China. The BRI trajectory in Myanmar remains intertwined with the country’s political landscape. The conflict in Myanmar that erupted after the 2021 coup has disrupted any potential benefits of Chinese infrastructure investments and deepened negative public sentiment toward China. The continued feasibility of the BRI now seems at risk, as SAC troops and the forces resisting military rule frequently clash near BRI project sites. Thus, while China seeks to protect its investments and long-term interests in Myanmar, China’s engagement with the SAC may come at a high cost and yield low returns.
Moe Thuzar acknowledges the inputs of Kyi Sin, research officer for the Myanmar and Thai Studies Programmes, for this piece.
