For most of the past two millennia, China was the world’s dominant economic power. The ancient Silk Road carried oriental goods from the thriving Chinese empire into the Indian subcontinent, the Islamic heartlands of the Middle East, and even to the frontiers of Europe, an area which lagged behind the Eastern colossus. Around the end of the 15th century, the tide began to turn. This was a crucial juncture in world history for two reasons: Firstly, the Age of Exploration ushered in the age of European predominance, which was to last until the global ascension to hegemonic status of the United States in 1945. Secondly, global commercial routes turned away from the inland Silk Road, towards the coasts and maritime trade.

China’s ambitious ‘Belt and Road’ initiative (BRI) seeks to change both of these trends in global history. When Xi Jinping rose to China’s highest office five years ago, he sought to shift the nation away from the more cautious, risk-averse foreign policy of his predecessors, Jiang Zemin and Hu Jintao, who followed Deng Xiaoping’s policy of tang guang yang hui – “conceal our capabilities, bide our time”. After the financial crisis of 2008 exposed the fragility of the US and European economies, calls grew for China to adopt a more assertive foreign policy. Xi Jinping has answered these calls. Xi has largely displaced the dated concept of “Socialism with Chinese Characteristics” with a more dynamic “Chinese Dream”. The BRI is an integral part of this shift from a passive to a proactive Chinese role in world affairs.

In 2013, Xi visited Kazakhstan and Russia to announce the Silk Road Economic Belt – the land-based aspect of the BRI plan to connect China with Central Asia, the subcontinent, Russia, the Middle East and Europe. Later that same year, Li Keqiang announced plans for a Maritime Silk Road during a trip to South East Asia. This sea-based counterpart aims to connect China with the southern rim of Asia, the Gulf region, and East Africa. Both leaders presented the initiative to deal with Asia’s chronic infrastructure deficiencies as a “Chinese Marshall Plan” – an allusion to the US’s efforts to rebuild Europe after the Second World War. China’s plan is even more ambitious. The target countries include 55 percent of the world’s GNP, 70 percent of the world’s population, and 75 percent of known energy reserves. Sceptics have been quick to claim that for all the initiative’s lofty rhetoric, there has been little in terms of practicalities. But just because the initiative has not yet achieved its aims, we should not dismiss it as all talk no substance, as concrete progress has been made.

One example of this concrete progress is the China-Pakistan Economic Corridor (CPEC). $62.5 billion is being spent on the development of a series of highways from the Chinese border to Islamabad and Peshawar, as well as Karachi on the Indian Ocean. Over a third of the population of Pakistan lives within 5km of the routes, so there is potential for the BRI to have a positive economic impact on a very large number of people. The CPEC has raised issues that China is going to need to address if the future of the initiative is going to be successful. Over 50 workers have been killed working on CPEC projects. How is Pakistan going to provide effective security? If national forces are not sufficient will private contractors be used? Could China send troops to secure its projects? Most countries would be quite hesitant to invite in Chinese security forces to protect investments. The question is an important one, as many of the overland routes envisaged under the BRI run through relatively less stable areas. China should use its early experience in Pakistan to act as a dress rehearsal for security provision across the entire initiative.

Most analysis of the BRI has sought to shed light on Beijing’s motives. It is difficult to disentangle what is economic, what is strategic and what is directed towards domestic audiences. The initiative responds to US criticisms that China has been a free-rider in the international system, while at the same time addressing a number of economic imperatives. Asian infrastructure projects provide an outlet for China’s excess industrial capacity, especially in coal, steel and machine tools. Long-term resource security also factors into the situation. Central Asia is rich in minerals that can help to power the Chinese economy throughout the century. Drawing the central Asian countries into an economic network with China at its heart will serve to secure much needed minerals for future use. China also seeks to stabilize its western regions. Per capita income in provinces such as Xinjiang and Qinghai is only a quarter of the eastern cities of Shanghai and Beijing. Catch-up could take three to five decades. The BRI – by potentially transforming Khorgos, Xinjiang into a major distribution hub for central Asia – is a good example of how China is seeking to increase the economic relevance of its restless west.

The largest motive however is financial. China has long protested against perceived inequalities in the international financial system that stem from the Bretton Woods Conference of 1944, in which the Allies met to design the financial and monetary system of the post-war world. China currently only has a 6 percent voting share in the International Monetary Fund (IMF) compared to the United States’ 17 percent. In the Japanese-led Asian Development Bank (ADB), China’s shareholding on the board is just 5 percent. To remedy this situation, China launched the Asia Infrastructure Investment Bank (AIIB) in 2016, giving itself a 26 percent voting share, effectively a veto due to the requirement of a 75 percent supermajority for important decisions. Despite a US campaign to dissuade its allies from joining, when the UK unexpectedly announced its decision to sign up, many other waverers, including France and Germany, followed suit. The bank’s leader, Jin Liqun, a former ADB vice president, has sought to allay US and Japanese fears that the AIIB would flood the Asian development market with loans for projects with low standards on anti-corruption and environmental protection. Though the new bank will have a significant impact, it is probably not going to revolutionise the current US-led global financial system, though it will certainly shake up the Asian market where it has pledged to invest 100 billion in BRI projects.

Funding for the BRI is to come from several sources. Although there is a ‘Silk Road Fund’ – a $40 billion private equity fund drawn from China’s huge foreign exchange reserves, the real force behind BRI funding will be state commercial banks. The Bank of China is planning to invest $100 billion in Asian infrastructure just in 2016-18 alone, along with the China Export-Import Bank. These sound like huge sums, but it is difficult to disentangle what investment would not have been planned had it not been for the BRI, and what would have been invested anyway but has been rebranded under the BRI banner. Indeed, the National Development and Reform Commission (NDRC) has produced an initial list of successful investment projects including new air freight hubs in Chengdu and Xiamen which predate Xi’s formulation of the BRI. The BRI label was simply plastered on at the last minute. Some of these BRI projects, therefore, have done nothing to add to total demand.

For the initiative to be successful in the long term, several problems need to be addressed, foremost among them a lack of coordination, a shortage of expertise, and how to respond to local political challenges.

The lead coordinating organization is technically the NDRC. However, a more streamlined inner circle, the ‘Small Leading Group’ – chaired by Zhang Gaoli, the first-ranked Vice Premier – has been created to tackle issues and make final judgements. The NDRC, which is nominally charged with overseeing the implementation of projects, cannot overrule this inner circle. Moreover, the CEOs of Chinese state-owned enterprises (SOEs) have taken to bypassing central ministries and communicating directly with members of the leading group. Some provincial governors and CEOs of SOEs outrank NDRC ministers in the party apparatus, if not the government structure, further confusing the chain of command.

A shortage of relevant expertise will also need to be dealt with. Although China has no shortage of engineers with the requisite technical knowledge, more is necessary if China is to navigate a potential minefield of political obstacles in the path of the initiative. Among Chinese academics, there are few experts on Central Asia and the Middle East where political problems may arise. The managers of Chinese SOEs, who will play a leading part in many projects, are unfamiliar with the trade union politics that they will encounter abroad.

Moreover, it remains to be seen how China will respond to political challenges in target countries, given a historic commitment to non-intervention. During the rule of the military junta in Myanmar, China financed the construction of pipelines from the Bay of Bengal to the Chinese border. However, Myanmar’s recent transition to democracy has given locals in the path of Chinese construction projects a voice to protest. The future of Chinese infrastructure projects in the country, namely a planned highway from Kunming in southwest China through Myanmar to Kolkata in India, are far from certain.

International reception has been cautiously optimistic. The US, which sent a representative to the Belt and Road Forum in May, will probably choose a path of pragmatic engagement with the initiative rather than warning against grand geopolitical designs. In Britain, the opportunities that the initiative provides to improve trade have been latched onto. Baron Sassoon, chairman of the China-Britain Business Council, has called for the creation of a Belt and Road Office, to be known as “BRO”, because after Brexit, Britain is going to need all the “bros” it can get. Central Asian states have welcomed partnerships with China which could help to reduce their dependence on Russia, the traditional patron.

The BRI has the potential to bring the benefits of increased trade to much of the world’s population. But even if China can overcome the hurdles in its path, the initiative needs to be implemented responsibly if it is to have a positive impact on people’s lives. This means providing security that addresses the concerns of its partners and works collaboratively with them, avoiding projects which would be vulnerable to the manipulation of corrupt local elites, and giving priority to more environmentally friendly projects rather than ones that would have a strong adverse effect on the atmosphere or local ecosystems.