The past two years have not been favorable to the Belt and Road Initiative, the flagship infrastructure project of Chinese President Xi Jinping. First, the United States called the initiative a “debt trap” – a shark-lending system aimed at luring poor countries into economic vassalage – and began to pressure its allies and partners to stay away. Then came COVID-19. Last summer, the Chinese Foreign Ministry admitted that up to 60% of Belt and Road projects have been affected to some extent by the pandemic. That number is surely higher now. New Chinese loans abroad have fell precipitously. This year, as low-income countries face debt squeeze, Chinese lenders could face huge losses.

But the Belt and Road initiative is not dead from COVID-19. On the contrary, Xi and other senior Chinese officials continue to trumpet the initiative. Their message is very consistent: In 2021, China will begin to gradually reduce its new investments in traditional capital-intensive infrastructure, both at home and abroad. In this way, the pandemic provides an excuse to cut losses on unsustainable projects. Instead, the initiative will refocus on public health (especially vaccines), green technologies and digital services. This new belt and highway route – high-tech and more trade-than-investment-oriented – will fit perfectly into China’s new “”.dual circulation”Economic concept, which emphasizes Chinese domestic consumption. It will also be more attractive to partner countries than its previous version.

The past two years have not been favorable to the Belt and Road Initiative, the flagship infrastructure project of Chinese President Xi Jinping. First, the United States called the initiative a “debt trap” – a shark-lending system aimed at luring poor countries into economic vassalage – and began to pressure its allies and partners to stay away. Then came COVID-19. Last summer, the Chinese Foreign Ministry admitted that up to 60% of Belt and Road projects have been affected to some extent by the pandemic. That number is surely higher now. New Chinese loans abroad have fell precipitously. This year, as low-income countries face debt squeeze, Chinese lenders could face huge losses.

But the Belt and Road initiative is not dead from COVID-19. On the contrary, Xi and other senior Chinese officials continue to trumpet the initiative. Their message is very consistent: In 2021, China will begin to gradually reduce its new investments in traditional capital-intensive infrastructure, both at home and abroad. In this way, the pandemic provides an excuse to cut losses on unsustainable projects. Instead, the initiative will refocus on public health (especially vaccines), green technologies and digital services. This new belt and highway route – high-tech and more trade-than-investment-oriented – will fit perfectly into China’s new “”.dual circulation”Economic concept, which emphasizes Chinese domestic consumption. It will also be more attractive to partner countries than its previous version.

China’s plans were made clear in remarks by Meng Wei last November, spokesperson for the National Development and Reform Commission, which oversees the Belt and Road projects. Even like her insisted that the program “has shown full resilience … in the face of the pandemic”, she mainly focused her speech on “the new breakthroughs on the silk road to health”. More and more countries, she said, “have seen the cooperation opportunities of the Health Silk Road, the Digital Silk Road and the Green Silk Road.” Ning Jizhe, vice-chair of the committee, developed her comments in a follow-up word in Hong Kong.

The “Silk Road of Health” – the race for the COVID-19 vaccine – is Beijing’s top priority. China wants to be seen as a responsible high-tech superpower that will help the world beat the pandemic, not a shady authoritarian regime that started it. And China has a pioneering advantage in distributing its vaccines to non-Western countries. Vaccine makers Sinopharm and Sinovac are already delivering millions of doses everywhere from Indonesia to the United Arab Emirates. Throughout the pandemic, Xi has positioned the Chinese vaccine as a “global public good.” This implies that China will heavily subsidize foreign buyers and favor its long-standing Belt and Road partners.

The “Green Silk Road” is another way for China to restore its international reputation while selling its high-tech products abroad. recent from China commitment Becoming carbon neutral by 2060 is also an industrial policy: it plans to deepen its dominance in the rapidly growing foreign market for wind turbines, photovoltaics, electric vehicles, lithium-ion batteries and smart grid technologies. In 2019, more than 70 percent world-made photovoltaic solar panels are made in China. China also controls three-quarters of the world’s lithium-ion battery cell manufacturing capacity. These are some of the fast growing manufacturing industries: 72% of the new net electricity production capacity installed in the world in 2019 was renewable.

Finally, a new impetus for the “Digital Silk Road”, launched in 2016, will support the international expansion of Chinese private technology companies under the close supervision of the Communist Party. China now accounts for 23% of global cross-border data flows, mainly through the use of Chinese applications and services in Japan and Southeast Asia. This is almost double the share of the United States. China is also deploying a digital renminbi in an effort to collect more data and weaken the dominance of the US dollar. Some Chinese technology companies are exporting ”smart city technologies. “Others propose integrated cities or”country-as-platform”Solutions, which could be an understatement to export the techno-authoritarian toolbox.

By refocusing on these three priorities, the new Belt and Road initiative will fit neatly into China’s national post-pandemic macroeconomic strategy, known as “dual circulation”. Under the leadership Under economic tsar Liu He, China is finally reconsidering the debt-fueled growth model that has guided its development for more than a decade. As Liu argued in the People’s Daily, in 2021, China should instead focus on stimulating household consumption, including low-value imported goods, while boosting exports of high-tech products. Such reforms, Liu long argued, “will remove the risks” from the Chinese financial system; as Beijing foreign debtors clamor when it comes to loan cancellations, it makes less and less sense for China to lend indiscriminately to high-risk countries like Pakistan and Venezuela.

Most of China’s trade partners are discovering this new Belt and Road irresistible– it is a formula for rapid post-pandemic economic normalization. And they are already benefiting from it. Chinese imports hit an all-time high in 2020, thanks to a stronger renminbi. From a Chinese perspective, however, this high-tech Belt and Road, more trade-focused than investment-driven, is more sustainable than the chaotic, high-risk, debt-dependent model that preceded it.