China's President Xi Jinping and Tajikistan's President Emomali Rahmon at the Second Belt and Road Forum in Beijing in April 2019. Photo: Valery Sharifulin/TASS via Getty Images

The World Bank has released a study on China’s Belt and Road Initiative (BRI) that predicts major economic benefits, but only if Beijing makes some even bigger course corrections.

The big picture: While the authors find that infrastructure can increase growth through trade and investment, these gains depend on a host of reforms such as greater transparency and data reporting — especially around debt, open procurement, and social and environmental standards. Essentially, the study advises China that success requires becoming more like the World Bank.

Details: The study focuses on the BRI's transportation projects, forecasting that they could lift 7.6 million people from extreme poverty (earnings below $1.90 a day) if successfully completed.

  • The world needs more infrastructure, especially developing countries in Asia, and it stands to benefit from anyone who provides it the right way.

Yes, but: Building infrastructure does not automatically create value, the study warns. Success depends on picking the right projects and delivering them effectively, otherwise they destroy more value than they create.

  • While Chinese officials sell the BRI as “win-win,” some partner countries, like Mongolia and Tajikistan, could lose out as the costs of infrastructure exceed the gains. They also face particularly high risks of default from BRI–related financing.
  • About half of BRI transportation projects are expected to provide little value, according to another recent World Bank study.

Where it stands: China likes the BRI just the way it is.

  • Part of the problem is that its state-owned enterprises are eager to build regardless of economic viability; having poured more concrete between 2011 and 2013 than the United States used during the entire 20th century, they have run out of things to build at home.
  • In the absence of transparency and effective oversight, these firms can bribe local officials in recipient countries to greenlight more and bigger projects.

Between the lines: China also faces a massive coordination challenge. Unlike efforts led by multilateral development banks, most of the BRI’s transportation corridors are defined only at the national level and do not name or prioritize individual cities and roadways. Without adequately defined scopes, these projects could squander resources.

The bottom line: The potential benefits the World Bank lays out are not unique to Chinese transportation projects. But China’s current approach to delivering infrastructure makes it less likely those benefits will materialize.

Jonathan Hillman is director of the Reconnecting Asia Project at the Center for Strategic and International Studies.

Go deeper

Updated 33 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 2:30 p.m. ET: 19,172,505 — Total deaths: 716,327— Total recoveries — 11,608,417Map.
  2. U.S.: Total confirmed cases as of 2:30 p.m. ET: 4,902,692 — Total deaths: 160,394 — Total recoveries: 1,598,624 — Total tests: 59,652,675Map.
  3. Politics: Trump floats executive action even if stimulus deal is reached.
  4. Education: Cuomo says all New York schools can reopen for in-person learning.
  5. Public health: Surgeon general urges flu shots to prevent "double whammy" with coronavirus.
  6. World: Africa records over 1 million coronavirus cases.

General Motors tries to revive incendiary lawsuit vs. Fiat Chrysler

Illustration: Eniola Odetunde/Axios

General Motors is trying to revive an incendiary lawsuit against Fiat Chrysler Automobiles with explosive new allegations including bribes paid from secret offshore bank accounts and a union official acting as a double agent between the two automotive giants.

Why it matters: The extraordinary legal battle is occurring amid earth-shaking changes in the global auto industry that threaten to turn both litigants into dinosaurs if they aren't nimble enough to pivot to a future where transportation is a service, cars run on electrons and a robot handles the driving.

3 hours ago - Health

Cuomo says all New York schools can reopen for in-person learning

Gov. Cuomo on July 23 in New York City. Photo: Jeenah Moon/Getty Images

New York Gov. Andrew Cuomo announced Friday that all school districts across the state can choose to reopen for in-person learning because it has so far maintained low enough coronavirus transmission rates.

Why it matters: It’s another sign that the state, once the global epicenter of the pandemic, has — at least for now — successfully curbed the spread of the virus even as infections have surged elsewhere around the country.