The Belt and Road Initiative: “Four-Wheel Drive” and Debt Financing: Deepening Cooperation Requires Improvements on Financing Mechanisms and Multilateral Governance

This chapter examines the systemic mechanisms behind the rapid progress of China's Belt and Road Initiative (BRI) from the perspective of a "Four-Wheel Drive" framework — comprising bilateral trade, engineering contracting, direct investment, and debt financing. Among these, debt financing has played a particularly pivotal role in enabling large-scale infrastructure cooperation with BRI partner countries. Drawing on data from the World Bank, China's Ministry of Commerce, and the AEI China Global Investment Tracker, the chapter provides a detailed quantitative analysis of each "wheel," with special attention to statistical discrepancies arising from shifts in the sample of BRI partner countries. It further investigates the new wave of sovereign debt crises triggered by the COVID-19 pandemic, geopolitical conflicts, and monetary tightening in advanced economies, analyzing how these developments have constrained China's prior debt-financing model and led to a contraction in lending to BRI countries. The chapter concludes by exploring policy implications for innovating multilateral debt governance frameworks and adjusting financing approaches to sustain and deepen BRI cooperation in an era of heightened debt vulnerability among developing nations.