The report released Wednesday by the Green Finance & Development Center at Shanghai’s Fudan University looked at China’s investment in its long-running Belt and Road Initiative (BRI), which aims to recreate the Silk Road for the modern age.
Overall 2021 BRI investment dropped from $60.5 billion to $59.5 billion as China follows through with a plan to drop overall foreign investment to $550 billion between 2021 and 2025 – down 25% from $740 billion between 2016 and 2020 – but investment increased in Africa and the Middle East. Iraq in particular benefited from around $10.5 billion in construction contracts, the report found.
“Belt and Road Initiative is almost like a Christmas tree, in the sense that you can hang almost anything on there,” Dean Cheng, senior research fellow on Chinese political and security affairs at the Heritage Foundation, told Fox News Digital.
“If you are the Chinese, and you are a state-owned corporation, and you want to do something, you yell out ‘Belt and Road Initiative’ to justify things.”
Cheng explained that the initiative covers projects of “median significance” to keep Chinese businesses running, including cement and steel and other construction-related businesses. The 2021 report showed the vast majority of investments for BRI focus on energy, with transport investments the second-largest beneficiary.
China and the Middle East already enjoy a fairly strong relationship as the Far East titan draws most of its supply of crude oil from the region, according to Worlds Top Exports
The U.S. initiated a withdrawal of most troops from Iraq toward the end of former President Trump’s administration, but the military maintains a force of around 2,500 troops that mainly serve advising and training roles within the country, leaving the U.S. with limited influence in the country.
“Being a dominant buyer absolutely gives you leverage,” Cheng added. “When you’re the big buyer, you have influence, and when you’re the big seller, you have influence.”
Completing the BRI would provide China a massive economic boost and influence over much of Central Asia and into the Middle East. Cheng argued that China would make this kind of investment regardless of the U.S. position in the region.
“[China’s] going to want to build political ties to the region, and in that regard it’s useful to look at the breakdowns and see how the Chinese are continuing to invest in Iran, even as they buy oil from Iran in defiance of U.S. sanctions,” Cheng explained. “But [they] also buy more oil from Saudi Arabia, the UAE, as well as sell arms to that region to build political ties.”
Iraq recently signed an agreement with Chinese companies to build 1,000 schools, which will be funded through oil products, the Financial Times reported.