IDEAS home Printed from https://ideas.repec.org/a/eee/jotrge/v87y2020ics0966692319307112.html
   My bibliography  Save this article

Demystifying Chinese overseas investment in infrastructure: Port development, the Belt and Road Initiative and regional development

Author

Listed:
  • Liu, Zhigao
  • Schindler, Seth
  • Liu, Weidong

Abstract

China's outward investment has increased tremendously in recent years and it is currently a global leader in the construction of transportation infrastructure. While its signature ‘Belt and Road Initiative’ (BRI) is often portrayed as a threat by policy makers and media in the West, this article approaches the BRI from the perspective of Beijing. We review Chinese infrastructure investment and show that rather than a monolithic strategy aimed at world domination, the BRI is driven by a range of Chinese stakeholders situated at different scales whose motives vary from achieving strategic geopolitical advantage to profit-maximization. We focus on port investments to demonstrate that the BRI accelerated an ongoing trend of increasing Chinese investment in overseas ports that began in the early 2000s. We subsequently present mini-case studies of port projects Gwadar, Pakistan and Kuantan, Malaysia, which illustrate that large Central Government state-owned enterprises (SOEs) pursue strategic objectives while SOEs situated at the province and city levels are motivated by economic incentives. All Chinese investors embrace the ‘port-park-city’ model pioneered by Shenzhen, and we highlight its potential to foster regional development. We conclude that future research on Chinese infrastructure projects should be relational, multi-scalar and multi-sited.

Suggested Citation

  • Liu, Zhigao & Schindler, Seth & Liu, Weidong, 2020. "Demystifying Chinese overseas investment in infrastructure: Port development, the Belt and Road Initiative and regional development," Journal of Transport Geography, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:jotrge:v:87:y:2020:i:c:s0966692319307112
    DOI: 10.1016/j.jtrangeo.2020.102812
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0966692319307112
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jtrangeo.2020.102812?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Michael Dunford & Weidong Liu, 2019. "Chinese perspectives on the Belt and Road Initiative," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 12(1), pages 145-167.
    2. Francois, Joseph & Manchin, Miriam, 2013. "Institutions, Infrastructure, and Trade," World Development, Elsevier, vol. 46(C), pages 165-175.
    3. Brenner, Neil, 2004. "New State Spaces: Urban Governance and the Rescaling of Statehood," OUP Catalogue, Oxford University Press, number 9780199270064.
    4. Bonfatti, Roberto & Poelhekke, Steven, 2017. "From mine to coast: Transport infrastructure and the direction of trade in developing countries," Journal of Development Economics, Elsevier, vol. 127(C), pages 91-108.
    5. Pritish Behuria & Tom Goodfellow, 2019. "Leapfrogging Manufacturing? Rwanda’s Attempt to Build a Services-Led ‘Developmental State’," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(3), pages 581-603, July.
    6. Xiangming Chen, . "Change and continuity in special economic zones: a reassessment and lessons from China," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    7. Baniya, Suprabha & Rocha, Nadia & Ruta, Michele, 2020. "Trade effects of the New Silk Road: A gravity analysis," Journal of Development Economics, Elsevier, vol. 146(C).
    8. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    9. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    10. Xiangming Chen, 2018. "Globalisation redux: can China’s inside-out strategy catalyse economic development and integration across its Asian borderlands and beyond?," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 11(1), pages 35-58.
    11. Lin, Weiqiang, 2019. "Transport geography and geopolitics: Visions, rules and militarism in China's Belt and Road Initiative and beyond," Journal of Transport Geography, Elsevier, vol. 81(C).
    12. Bastos, Paulo, 2020. "Exposure of belt and road economies to China trade shocks," Journal of Development Economics, Elsevier, vol. 145(C).
    13. Wang, Haizhuang, 2014. "Preliminary investigation of waterfront redevelopment in Chinese coastal port cities: the case of the eastern Dalian port areas," Journal of Transport Geography, Elsevier, vol. 40(C), pages 29-42.
    14. Lall, Somik V. & Lebrand, Mathilde, 2020. "Who wins, who loses? Understanding the spatially differentiated effects of the belt and road initiative," Journal of Development Economics, Elsevier, vol. 146(C).
    15. Henry Wai-chung Yeung, 2009. "Regional Development and the Competitive Dynamics of Global Production Networks: An East Asian Perspective," Regional Studies, Taylor & Francis Journals, vol. 43(3), pages 325-351.
    16. Zhao, Qianyu & Xu, Hang & Wall, Ronald S & Stavropoulos, Spyridon, 2017. "Building a bridge between port and city: Improving the urban competitiveness of port cities," Journal of Transport Geography, Elsevier, vol. 59(C), pages 120-133.
    17. Thomas Farole, 2011. "Special Economic Zones in Africa : Comparing Performance and Learning from Global Experience," World Bank Publications - Books, The World Bank Group, number 2268, December.
    18. N. A. Phelps & P. Waley, 2004. "Capital Versus the Districts: A Tale of One Multinational Company’s Attempt to Disembed Itself," Economic Geography, Taylor & Francis Journals, vol. 80(2), pages 191-215, April.
    19. Wang, Chao & Lim, Ming K. & Zhang, Xinyi & Zhao, Longfeng & Lee, Paul Tae-Woo, 2020. "Railway and road infrastructure in the Belt and Road Initiative countries: Estimating the impact of transport infrastructure on economic growth," Transportation Research Part A: Policy and Practice, Elsevier, vol. 134(C), pages 288-307.
    20. Mengqiu Lu & Yu Chen & Robin Morphet & Yuqi Lu & Enkang Li, 2019. "The spatial competition between containerised rail and sea transport in Eurasia," Palgrave Communications, Palgrave Macmillan, vol. 5(1), pages 1-11, December.
    21. Peter J Buckley & L Jeremy Clegg & Hinrich Voss & Adam R Cross & Xin Liu & Ping Zheng, 2018. "A retrospective and agenda for future research on Chinese outward foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(1), pages 4-23, January.
    22. Chen, Maggie Xiaoyang & Lin, Chuanhao, 2020. "Geographic connectivity and cross-border investment: The Belts, Roads and Skies," Journal of Development Economics, Elsevier, vol. 146(C).
    23. James T. Murphy & Seth Schindler, 2011. "Globalizing development in Bolivia? Alternative networks and value-capture challenges in the wood products industry," Journal of Economic Geography, Oxford University Press, vol. 11(1), pages 61-85, January.
    24. Shi, Hao & Huang, Shaoqing, 2014. "How Much Infrastructure Is Too Much? A New Approach and Evidence from China," World Development, Elsevier, vol. 56(C), pages 272-286.
    25. Justin Yifu Lin, 2012. "New Structural Economics : A Framework for Rethinking Development and Policy," World Bank Publications - Books, The World Bank Group, number 2232, December.
    26. Markus Hesse, 2004. "Land For Logistics: Locational Dynamics, Real Estate Markets And Political Regulation Of Regional Distribution Complexes," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 95(2), pages 162-173, April.
    27. World Bank, 2009. "Geography in Motion: World Development Report 2009 (excerpt)," Transnational Corporations Review, Ottawa United Learning Academy, vol. 1(3), pages 40-46, September.
    28. Coe, Neil M. & Yeung, Henry Wai-chung, 2015. "Global Production Networks: Theorizing Economic Development in an Interconnected World," OUP Catalogue, Oxford University Press, number 9780198703914.
    29. Andrew Collier, 2018. "China Buys the World," Springer Books, Springer, number 978-981-10-7494-3, December.
    30. WANG, James Jixian & YAU, Selina, 2018. "Case studies on transport infrastructure projects in belt and road initiative: An actor network theory perspective," Journal of Transport Geography, Elsevier, vol. 71(C), pages 213-223.
    31. World Bank, 2020. "World Development Report 2020," World Bank Publications - Books, The World Bank Group, number 32437, December.
    32. Phelps, Nicholas A. & Stillwell, John C.H. & Wanjiru, Roseline, 2009. "Broken Chain? AGOA and Foreign Direct Investment in the Kenyan Clothing Industry," World Development, Elsevier, vol. 37(2), pages 314-325, February.
    33. Pritish Behuria & Tom Goodfellow, 2019. "Correction to: Leapfrogging Manufacturing? Rwanda’s Attempt to Build a Services‑Led ‘Developmental State’," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(3), pages 703-703, July.
    34. Susanne Frick & Andrés Rodríguez-Pose, . "Are special economic zones in emerging countries a catalyst for the growth of surrounding areas?," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    35. Morten Ougaard, 2018. "The Transnational State and the Infrastructure Push," New Political Economy, Taylor & Francis Journals, vol. 23(1), pages 128-144, January.
    36. Ho-fung Hung, 2018. "The tapestry of Chinese capital in the Global South," Palgrave Communications, Palgrave Macmillan, vol. 4(1), pages 1-6, December.
    37. Prem Chhetri & Mathews Nkhoma & Konrad Peszynski & Anjali Chhetri & Paul Tae-Woo Lee, 2018. "Global logistics city concept: a cluster-led strategy under the belt and road initiative," Maritime Policy & Management, Taylor & Francis Journals, vol. 45(3), pages 319-335, April.
    38. Zhai, Fan, 2018. "China’s belt and road initiative: A preliminary quantitative assessment," Journal of Asian Economics, Elsevier, vol. 55(C), pages 84-92.
    39. Haraguchi, Nobuya & Cheng, Charles Fang Chin & Smeets, Eveline, 2017. "The Importance of Manufacturing in Economic Development: Has This Changed?," World Development, Elsevier, vol. 93(C), pages 293-315.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jorn Koelemaij, 2022. "The world’s number 1 real estate development exporter? Assessing announced transnational projects from the United Arab Emirates between 2003–2014," Environment and Planning A, , vol. 54(2), pages 226-246, March.
    2. Yang, Dong & Li, Lu & Notteboom, Theo, 2022. "Chinese investment in overseas container terminals: The role of investor attributes in achieving a higher port competitiveness," Transport Policy, Elsevier, vol. 118(C), pages 112-122.
    3. Cristian Luise & Peter J. Buckley & Hinrich Voss & Emmanuella Plakoyiannaki & Elisa Barbieri, 2022. "A bargaining and property rights perspective on the Belt and Road Initiative: Cases from the Italian port system," Journal of International Business Policy, Palgrave Macmillan, vol. 5(2), pages 172-193, June.
    4. Lee, Paul Tae-Woo & Song, Zhaoyu, 2023. "Exploring a new development direction of the Belt and Road Initiative in the transitional period towards the post-COVID-19 era," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 172(C).
    5. Noorali, Hassan & Flint, Colin & Ahmadi, Seyyed Abbas, 2022. "Port power: Towards a new geopolitical world order," Journal of Transport Geography, Elsevier, vol. 105(C).
    6. Cristian Luise & Peter J. Buckley & Hinrich Voss & Emmanuella Plakoyiannaki & Elisa Barbieri, 2021. "The Role of Local Actors in the Implementation of the Belt and Road Initiative: the Example of the Italian Port System," Working Papers 07, Department of Management, Università Ca' Foscari Venezia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nugent, Jeffrey B. & Lu, Jiaxuan, 2021. "China's outward foreign direct investment in the Belt and Road Initiative: What are the motives for Chinese firms to invest?," China Economic Review, Elsevier, vol. 68(C).
    2. Jianhong Qi & Kam Ki Tang & Da Yin & Yong Zhao, 2020. "Remaking China’s Global Image with the Belt and Road Initiative: Is the Jury Out?," Discussion Papers Series 635, School of Economics, University of Queensland, Australia.
    3. Stefan Pahl & Marcel P. Timmer, 2020. "Do Global Value Chains Enhance Economic Upgrading? A Long View," Journal of Development Studies, Taylor & Francis Journals, vol. 56(9), pages 1683-1705, July.
    4. de Soyres, François & Mulabdic, Alen & Ruta, Michele, 2020. "Common transport infrastructure: A quantitative model and estimates from the Belt and Road Initiative," Journal of Development Economics, Elsevier, vol. 143(C).
    5. Seth Schindler & Jonathan Silver, 2019. "Florida in the Global South: How Eurocentrism Obscures Global Urban Challenges—and What We Can Do about It," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 43(4), pages 794-805, July.
    6. Huiwen Gong & Robert Hassink & Cassandra Wang, 2021. "Strategic coupling and regional resilience in times of uncertainty: the industrial chain chief model in Zhejiang, China," PEGIS geo-disc-2021_06, Institute for Economic Geography and GIScience, Department of Socioeconomics, Vienna University of Economics and Business.
    7. Koffi Dumor & Yao Li & Ma Yongkai & Enock Mintah Ampaw & Hafez Komla Dumor, 2022. "Evaluating the belt and road initiative effects on trade and migration: Evidence from the East African community," African Development Review, African Development Bank, vol. 34(1), pages 16-28, March.
    8. Liena Kano & Eric W. K. Tsang & Henry Wai-chung Yeung, 2020. "Global value chains: A review of the multi-disciplinary literature," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 577-622, June.
    9. Jeffrey B. Nugent & Jiaxuan Lu, 2020. "Does the All-China Federation of Industry and Commerce Align Private Firms with the Goals of the People's Republic of China's Belt and Road Initiative?," Asian Development Review, MIT Press, vol. 37(2), pages 45-76, September.
    10. Hannes Thees, 2020. "Towards Local Sustainability of Mega Infrastructure: Reviewing Research on the New Silk Road," Sustainability, MDPI, vol. 12(24), pages 1-35, December.
    11. Imran Ur Rahman & Mohsin Shafi & Liu Junrong & Enitilina Tatiani M.K. Fetuu & Shah Fahad & Buddhi Prasad Sharma, 2021. "Infrastructure and Trade: An Empirical Study Based on China and Selected Asian Economies," SAGE Open, , vol. 11(3), pages 21582440211, July.
    12. Ge, Ying & Dollar, David & Yu, Xinding, 2020. "Institutions and participation in global value chains: Evidence from belt and road initiative," China Economic Review, Elsevier, vol. 61(C).
    13. Fredrik Sjöholm, 2023. "The Belt and Road Initiative: Economic Causes and Effects," Asian Economic Papers, MIT Press, vol. 22(1), pages 62-81, Winter/Sp.
    14. Riccardo Crescenzi & Simona Iammarino & Carolin Ioramashvili & Andres Rodriguez-Pose & Michael Storper, 2019. "The Geography of Innovation: Local Hotspots and Global Innovation Networks," WIPO Economic Research Working Papers 57, World Intellectual Property Organization - Economics and Statistics Division.
    15. Anthony Enisan Akinlo & Segun Michael Ojo, 2021. "Economic consequences of covid-19 pandemic to the sub-Saharan Africa: an historical perspective," Papers 2111.01038, arXiv.org, revised Mar 2022.
    16. Zhang, Yun & Liu, Yun & Zhang, Yifei & Chen, Xin, 2022. "Globalization blueprint and households’ fintech debt: Evidence from China’s One Belt One Road initiative," International Review of Economics & Finance, Elsevier, vol. 79(C), pages 38-55.
    17. Schulhof, Vera & van Vuuren, Detlef & Kirchherr, Julian, 2022. "The Belt and Road Initiative (BRI): What Will it Look Like in the Future?," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    18. Zhou, Yaoming & Kundu, Tanmoy & Goh, Mark & Sheu, Jiuh-Biing, 2021. "Multimodal transportation network centrality analysis for Belt and Road Initiative," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    19. Behuria, Pritish, 2017. "The political economy of import substitution in the 21st century: the challenge of recapturing the domestic market in Rwanda," LSE Research Online Documents on Economics 69470, London School of Economics and Political Science, LSE Library.
    20. Haraguchi, Nobuya & Martorano, Bruno & Sanfilippo, Marco, 2019. "What factors drive successful industrialization? Evidence and implications for developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 266-276.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jotrge:v:87:y:2020:i:c:s0966692319307112. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-transport-geography .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.