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China developed a $1 trillion global infrastructure project involving trains and international commerce. The massive project spans Asia, Europe, and Africa; forming the backbone of an ambitious, massive economic idea courtesy of President Xi Jinping. The “One Belt, One Road” (OBOR) initiative is figuratively and literally forming ties between the Chinese and the rest of the world, creating jobs and forging diplomatic relationships.

Deemed China’s “project of the century,” the BRI has been facing challenges left and right. It insists the railway has a higher economic benefit than its potential financial return…

At present, Chinese engineers are already at work, creating tunnels and bridges in the mountains of Laos, a landlocked country south of China. The $6 billion 260-mile railway project will eventually serve as a bridge to eight Asian countries.

In Pakistan, a portion of what’s expected to cost $46 billion from Chinese investments is being used to build power plants that will address electricity shortages.

Elsewhere, Chinese planners are mapping train lines connecting Budapest, Hungary to Belgrade, Serbia. This transport corridor will serve as yet another path for Chinese products to get into Europe via a Chinese-owned port in Greece.

Recently renamed as “The Belt and Road Initiative” (BRI), $1 trillion economic plan is truly promising and bound to be influential. With President Xi gathering state leaders from over 60 countries as early as 2013, including Russia’s Vladimir Putin, China is slowly trying to reposition their country from an economy of pure export to leading the rest of the world. This way, although quite a bold idea, they can lead worldwide commerce on their own terms.

Cao Wenlian, Director General of the International Cooperation Center of the National Development and Reform Commission, stated that President Xi believes the BRI is a long-term plan that can help both current and future generations in boosting not only China’s economic growth but also the rest of the world’s. “The plan is to lead the new globalization 2.0.”

Bridging or Blocking the Global Infrastructure Gap?

The Chinese-led BRI plan presents both opportunities and challenges – the grand project is so large-scaled that it’s hard to fully grasp the idea in one go. At this time, the plan involves 65 countries with a combined population of 4.4 billion – touching about 62% of the world’s population and approximately 30% of the global economy.

Train in China

With China pledging $1 trillion for their intended economic shakeup, it’s easy to assume it’s quite a hefty and generous amount. In reality, the estimated infrastructure costs will amount to $26 trillion by 2030. Add to that the harsh truth that the less-developed countries within the BRI project only have an average yearly income of $6,312, and the combined gross domestic product (GDP) of all involved countries is $23 trillion, there may not be enough money in the world to fund the BRI.

While President Xi wants to use China’s wealth, power, and industrial knowledge in creating a “globalization 2.0,” the probable bottom line is having the BRI primarily reach China’s economic goals. It has been reported the country has plenty of steel, machinery, and cement, a significant enough capacity now that China’s economy has started to slow down.

A bold and risky proposition that mainly benefits China, the long-term BRI plan can also potentially help boost Chinese and global economic growth in years to come. It’s so incredible that many countries around the world have taken careful steps in response to it. There hasn’t been a project of this scale in history, which is the primary reason for its many challenges.

India, for instance, is not completely sold on the idea. Even though most of their neighboring countries have expressed interest, including Nepal which has sustained mutual ties with them, India remains skeptical and uninvolved. Experts on Chinese foreign policy believe that if India doesn’t join the BRI then they may face exclusion and suffer a lack of regional growth.

Analysts say that these BRI trains, although receiving media praise every so often, are actually economically pointless and that they are more politically-driven rather than market-driven. Most of its currently functional routes require steep subsidies ranging $3,500 to $4,000 per trip for every 20-foot container (unsubsidized, each would cost about $9,000). As such, China loses money on every shipment.

What, then, is their reason for creating and then subsidizing the project? By simply attracting dozens of countries to join in on the project, Beijing and the rest of China become top traders; the country ranks itself as one of the top global powers, generating worldwide influence and respect from its partners and other countries looking on.

Deemed China’s “project of the century,” the BRI has been facing challenges left and right. It insists the railway has a higher economic benefit than its potential financial return, and the project has had its share of challenges and delays. At this point, BRI’s success can go both ways, but China stays positive in continuing their pursuit of connecting their country to a third of the world’s population.

It’s a bold idea put into action. There is no chance that BRI will not have global impact, the only question remains, will it unite or divide those whom it serves.

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