Economic security of China: the implications of the belt and road initiative

Abstract

Goal – The aims of the research are to identify the most significant internal and external factors affecting the economic security of China and assess the importance of the Belt and Road Initiative for China's future development. Research methodology – In order to organize internal and external determinants of economic security of China, SWOT (strengths, weaknesses, opportunities and threats) analysis was applied. Moreover, an important element of the research process was an attempt to verify hypothesis that the Belt and Road Initiative is a key instrument of China’s economic security strategy. Score – China has transformed from a poor rural country into one of the main economic powers as a result of the economic reforms initiated in the late 1970s. However, we can observe that the economy of China is slowing down. In order to ensure economic security and maintain a stable economic growth as well as avoid the middle income trap China has introduced the Belt and Road Initiative. Since its announcement, the concept has been gradually gaining in importance and has finally become the key instrument of the Chinese foreign policy and a major element of economic development strategy. The main motive behind this project is to develop transport and energy infrastructure which will allow China to gain access to natural resources and new markets. An efficient transport network will facilitate trade, while energy infrastructure will prevent problems with energy and resource supply, which the Chinese economy needs. The Belt and Road Initiative is a way of boosting economic development of China through improving infrastructure from Asia to Africa and Europe and the establishment of trade links among all partner countries. The New Silk Road concept aims to use the advantages of the Chinese economy and the states participating in the initiative to stimulate its economic growth. Therefore, it is a strategy of providing long-term economic security. Originality/value – The paper raises the issue of the Chinese economic security understood as a long-term ability of the economy to achieve a relatively fast and sustainable economic growth. In this paper, the author defines the concept of economic security and with the help of SWOT analysis presents the strengths and weaknesses of China’s economy as well as opportunities and possible threats to its stability. Moreover, the paper includes comprehensive analysis of China’s motives behind the Belt and Road Initiative in the context of economic security of China.