The

multifaceted objectives of the Belt & Road Initiative:

Evidence from multiple case studies
Francesco Parola *
(parola@economia.unige.it) Giovanni Satta *
(giovanni.satta@economia.unige.it)
Claudio Ferrari *
(ferrari@economia.unige.it) Ilaria Filippone **

Alessio Tei # (ilaria_filippone@hotmail.it)

(alessio.tei@newcastle.ac.uk)

* University of Genoa, Department of Economics and Business Studies & CIELI

# University of Newcastle
** Banchero & Costa S.p.a. (trainee)
Agenda

1. Background of the study

2. Conceptual framework & method
3. Preliminary findings & implications
4. Limitations & further research
The Belt & Road initiative
v The Belt and Road Initiative (BRI), today also known as Belt and Road
Programme, constitutes the ultimate evolution of China's previous
opening-up policies.

Open
Go Global Go West Belt and Road
Door
Strategy Policy Initiative
Policy
(1990) (2000) (2013)
(1980)

Autumn November March 28, December May 14-15,

2013 8, 2014 2015 25, 2015 2017

• President Xi • The Silk Road • China releases • China • Fist Belt and
Jinping proposes Fund is set up to vision and established Road Forum for
the building of support BRI actions on Asian International
the BRI projects building the BRI Infrastructure Cooperation is
jointly with Investment held
partners Bank (AIIB)
involved

1. Background of the study

 The Belt & Road initiative

Source: HKTDC Source: Authors‘ elaboration on HKTDC,

UNCTAD et al.
v BRI aims to make China a global nation and a v This initiative spreads across over 65
recognized economic force worldwide, nations located in Asia, Middle East, Europe
breaking down political and economic and Africa, corresponding to the 63% of
boundaries with foreign countries. world population and 29% of global GDP,
v 6 main land corridors involved + 21st Maritime with an overall project value of about 900
Silk road billion USD (European Bank for
Reconstruction and Development, 2018).

1. Background of the study

Gap in extant literature

v Although several scholars and practitioners started to address this topic,

a number of issues are still under researched.

ü Scarce understanding of the multifaceted nature and objectives of BRI:

need for an overarching analytical approach.

ü Most studies adopt a Chinese standpoint, neglecting the involvement /

commitment of partnering countries. An increasing number of scholars are
addressing alternative view point (e.g.,
“BRI – Africa” Section at the IAME
Conference 2018)
ü Lack of theoretical approach to this economic and geopolitical
initiative.

1. Background of the study

Agenda

1. Background of the study

2. Research design & method
3. Preliminary findings & implications
4. Limitations & further research
 The aims of the study
1. To investigate BRI multiple objectives, including:
a. the expansion of the economic and geopolitical influence;
b. logistics and distribution facilitation;
c. independent energy sourcing.
2. To analyze 3 insightful case studies:
Ø the Pan-Asia Railway connecting China to South-East Asia
Ø the Port of Piraeus (Greece) connected to Central Europe via the
Balkan Silk Road
Ø the Lamu Port (Kenya) as part of LAPSSET together with the oil
pipeline network.
3. To apply the theoretical constructs elaborated by Mintzberg and Waters
(1985) in strategic management (emergent vs. deliberate strategy) for
understanding BRI evolutionary contents.

2. Research design & method

The BRI multifaceted objectives

Political & economic Ø to sustain the regional economic growth (and

the growth of China itself) supporting the
economic and social development of foreign
countries crossed by the initiative, reinforcing
mutual geopolitical ties.

Potential analytical lens

Logistics & Distribution Ø to support the distribution of export
products by reinforcing logistics chains and
building up additional infrastructural
connections, in order to ease the logistics of
goods with the main trade partners.

Energy sourcing Ø to realize a smooth logistics energy supply

chain. This would grant China to differentiate
its energy sources, to obtain more “supply
stability”, and to avoid the transit of energy
resources through the Malacca Strait.

1. Background of the study

Method and data
v Method
ü Appropriateness of the multiple case study methodology: managerial
perspective (“how” and “why” questions).
ü Each overseas investment project is identified as the unit of analysis.
ü Concerns and issues in the definition of the units of analysis (e.g., projects /
sub-projects; project phases; etc.)?
v Sampling procedure (3 projects)
ü Financial magnitude of the projects
ü Strategic relevance for countries/partners involved
ü Consistency respect to the research objectives
v Data gathering and sources
ü Institutional sources: e.g. World Bank, National Bureau of Statistics of China
ü Academic and scientific papers
ü Corporate financial statements and reports

2. Research design & method

 Sample selection and data gathering

Investment Country Value Description Status

1. Pan-Asia Railway China, Thailand, Not reported Length: 15,000 km Expected completion 2021, but
Cambodia, Laos, Vietnam, Central Route (Kunming-Vientiane-Bangkok-Kuala Lumpur-Singapore) political and social concerns in
Myanmar Eastern Route (Kunming-Hanoi-Ho Chi Minh City-Phnom Penh-Bangkok- countries outside China are mining the
Kuala Lumpur-Singapore) path resulting in slower construction
Western Route (Kunming-Mandalay-Rangoon-Bangkok-Kuala Lumpur- and delays.
Singapore)
2. Port of Piraeus Greece € 8 billion 3,7 million TEUs (2015) Completed
The port is part both of the Maritime Silk Road and the Land Silk Road Cosco finalized port acquisition
(privatisation) in 2016, after
operations management take over in
2009.
3a. Port of Lamu Kenya 3.1 billion USD 32 berths (3 by Kenya government, 29 by PPP) 1st berth: Jun 2018
Draft: 18m 2nd and 3rd berths: Dec 2020
3b. Lamu Oil Pipeline Kenya Pipeline Network: Length: 2,240 km Expected completion 2021/22
3.95 billion USD Crude Oil Pipeline: Lokichar- Lamu, Jonglei-Lokichar and Hoima-Lokichar
Refinery: 2.8 billion Products Pipeline: Lamu - Isiolo (refinery centre)-Moyale-Addis Ababa
USD Refinery: 120,000 bpd
Crude Import ex Sudan: 500,000 bpd
Export to Ethiopia: 57,700 bpd
Export through Lamu Port: 417,600 bpd

2. Research design & method

Agenda

1. Background of the study

2. Research design & method
3. Preliminary findings & implications
4. Limitations & further research
 The only project
Pan-Asia Railway (1/2) already started

Ø 3 high speed rail:

Pivotal hubs of the three railways
Ø 8 countries involved and their
ü Central route (Kunming-
Vientiane-Bangkok-Kuala
Lumpur-Singapore)
ü Eastern Route (Kunming-
Hanoi-ho Chi Minh City-Phnom
Penh-Bangkok-Kuala Lumpur-
Singapore)
ü Western Route (Kunming-
Mandalay-Rangoon-Bangkok-
Kuala Lumpur-Singapore)
respectively governments:
China, Vietnam, Laos, Cambodia,
Thailand, Myanmar and
Malaysia.

3. Preliminary findings and implications

Pan-Asia Railway (2/2)

Ø Objectives of the initiative with regard to BRI:

ü Construction of cross-border high speed railway to enhance the
transportation of goods among South Asia countries and to facilitate the link
between hinterland and ports.
ü Streamlining customs procedures and harmonizing regulations (whenever
possible) to foster economical connections.
Ø The project is slotted in other initiatives, besides BRI:
ü Greater Mekong Subregion Economic Cooperation Program.
ü ASEAN Economic Community of 2015.
Ø Complexity - besides engineering implications - related to:
ü The high number of countries involved and the harmonization with the other
projects ongoing.
ü Contracts and partnerships (e.g. joint venture) between local governments
and construction firms.

3. Preliminary findings and implications

Port of Piraeus
Ø In 2016, COSCO (China state owned company) purchased Piraeus port in the spirit
of BRI for € 8 billion
Ø Piraeus is the trade intermodal gateway to Europe:
ü Sea – The 21st Century Maritime Silk Road
ü Railway – Connection to Budapest and The Silk Road Economic Belt
Ø New investments are planned to intensify the volume of traffic

Positive effect on:

ü Greek economy (e.g.
port and maritime
economy, country’s
GDP)
ü Countries in the
surrounded area
connected by railway

3. Preliminary findings and implications

Port of Lamu
Ø The project is a pivotal element of LAPSSET initiative (USD 24.5 billion):
Ø 32 deep sea berths (around USD 5 billion) - 23 berths completed in 2030
Ø The port will double its cargo handling capacity
Ø Freight corridor between Port of Lamu and the Kenya’s hinterland, South Sudan and
Ethiopia through a new railway to speed up goods transportation
Ø Kenya will enhance its position as gateway to Africa

Positive effect on:

ü Freigth movements
inside Kenya and
with the other
African countries
ü African trades with
Asian and European
countries, by sea
connection (OBOR)

3. Preliminary findings and implications

 Preliminary findings

The multifaceted objectives of the sample

BRI projects

BRI as emergent
strategy

3. Preliminary findings and implications

 Main implications (1/3)

v The multiple case study methodology enlightens well the multifaceted

concept of BRI
v Sample projects bring relevant implications in different profiles, touching
economics, geopolitics and logistics fields:
§ rising influence of China over global economy and geopolitics
§ generation of new transportation routes
§ birth of new supply and demand sources (new markets)
§ growing of worldwide trade volume
§ social and economic improvement of crossed (developing) countries
v Chinese overseas investments can be seen as “opportunity windows” for
the partnering countries and their growth.
v Crossed countries offer a balanced mix between supply-oriented (raw
materials) and distribution-oriented (products and services) nations.

3. Preliminary findings and implications

 Main implications (2/3)

v The outcome suggest that practitioners and policy makers located in

the countries hosting Chinese investments should adopt a more (pro-
)active behaviour in order to enrich the investment proposals.
v Chinese stakeholders are expected to adapt the ongoing projects to the
needs expressed by the local economic background and community, thus
enabling the diffusion of economic growth and social wellbeing.
v The more active commitment of policy makers and practitioners should
also reinforce the (geo-)political and cultural ties between Eastern and
Western regions.
v Looking at Europe, the implementation of infrastructural projects within
the TEN-T networks can constitute a valuable strategic complement to
the maritime entry points (i.e. gateways) defined by Chinese investors.

3. Preliminary findings and implications

 Main implications (3/3)
v Despite of the complexity of the project and the cost of the investments,
OBOR is fruitful opportunity field both for private investors and public
administration.
v The conceptual framework
based on Mintzberg &
Walters Theory (1985)
provides useful insights for
understanding BRI
evolutionary dimensions:
ü BRI can be considered as
a (multi-agent) long term
strategy subjected to
expected shifts (e.g.,
unrealised strategy).

ü At the same time, it represents a huge chance for private and public actors to exploit
the emerging opportunities, also leveraging on their bargaining power as
investors/market regulators (e.g., emergent strategy).
3. Preliminary findings and implications
Agenda

1. Background of the study

2. Research design & method
3. Preliminary findings & implications
4. Limitations & further research
 Limitations and further research
1. Starting point: The v Additional theoretical perspectives:
outcomes advance the extant ü Network theories
knowledge on BRI multiple
ü Game theories
objectives but only constitute
ü Multi-agent theories
a starting point for further
refinements and conceptual v Actors: different potential units of
argumentation on the analysis (e.g. countries; partners; etc.)
“emerging nature” of BRI and decision maker levels
strategy.

Country Y
(or partner «Y»)

Or the opposite?

China
(or partner «X»)

4. Limitations and further research

 Limitations and further research

2. Scope of the analysis v Future studies are encouraged to

investigate other BRI-related projects
for testing the appropriateness of
preliminary results.

3. Data gathering procedure v Need for ad hoc methodological

protocols for gathering data, ensuring
validity and consistency

4. Limitations and further research

 parola@economia.unige.it
ferrari@economia.unige.it
alessio.tei@newcastle.ac.uk
giovanni.satta@economia.unige.it
ilaria_filippone@hotmail.it