China’s Belt and Road Policy: Issues and Suggestions

Abstract

China has embarked on an ambitious plan to create a new silk road but on a global scale. China’s motivations are in question due to a number of empirical results including creating debt problems in several countries and appearing to favor Chinese firms over firms from other countries in rewarding project contracts. This paper looks at the empirical evidence and discusses the portfolio of possible motivations behind the program; Humanitarianism, economic gain to China, an addiction to infrastructure development, and political power. It also looks at the role the United States might play in improving the policy. Finally, we focus on how competition in finance can improve outcomes and offer an institutional structure, a Sovereign Wealth Fund mutual fund, that could help deliver that competition.