The Belt and Road Initiative (BRI) has marked a record-breaking year in 2024, with over $70.7 billion in construction contracts and $51 billion in investments. This surge, highlighted in the China Belt and Road Initiative Investment Report 2024, co-published by the Griffith Asia Institute (GAI) and the Green Finance & Development Centre (GFDC), underscores a pivotal shift in China’s global construction strategy. The Middle East, emerging as the top regional recipient of Chinese BRI engagement with $39 billion, is at the forefront of this transformation, particularly in sectors like fossil fuels, infrastructure, and renewable energy.
Dr. Christoph Nedopil, founding director of the Green Finance & Development Centre and Professor and Director of GAI, offers valuable insights into the driving forces behind this surge. “In 2024, we identified BRI projects totaling over $120 billion—a record high since the initiative’s launch in 2013,” he notes. Despite a slower global economic growth, China’s economic expansion and the rise of world-leading companies, especially in technology and infrastructure, have fueled this growth. Nedopil emphasizes that Chinese businesses are poised to navigate global market uncertainties with strategic agility, focusing on sectors like natural resources where opportunities abound.
The Middle East’s prominence in Chinese BRI engagement is driven by significant investments in fossil fuels, particularly gas. Major construction deals include oil processing projects in Iraq and gas-related infrastructure in Saudi Arabia. Additionally, Chinese companies have invested in renewable energy, steel, and energy technology in the region. This focus on renewable energy is part of a broader trend. “BRI energy investments have become increasingly green, particularly following China’s decision to halt overseas coal financing in 2021,” Nedopil explains. The shift is driven by both supply and demand factors, with Chinese companies leading in green energy technologies and the economic benefits of green energy making it an attractive investment.
The trend of rising construction deal sizes alongside shrinking investment deal sizes indicates a strategic shift. While large construction deals, particularly in the Middle East, have skewed overall figures, it also suggests a broader participation of Chinese companies in BRI countries. This shift from large infrastructure projects to “soft” sectors like technology, digital connectivity, and financial services aligns with China’s long-term economic goals of enhancing global competitiveness in high-tech industries and digital infrastructure.
Geopolitical tensions, including U.S.-China trade disputes, are reshaping BRI strategies. Companies are seeking stable environments where they can manage risks effectively. The Middle East, with its robust growth prospects and clear political strategies, remains a key area for Chinese engagement. The ability to navigate trade restrictions and build alternative supply chains will likely reinforce this trend.
Looking ahead, the Middle East will continue to be a hotspot for Chinese investment, driven by regional growth, economic diversification, and an ongoing construction boom. This will fuel infrastructure-related investments, particularly in energy generation and transportation. Additionally, there is potential for joint project development between Middle Eastern and Chinese partners in third markets, such as Africa and Asia.
The evolving landscape of the BRI presents both opportunities and challenges. As Chinese companies pivot towards greener, technology-driven projects, the construction sector is poised for a transformative shift. This shift is not just about building infrastructure; it’s about building a sustainable future. The focus on renewable energy, digital connectivity, and strategic investments underscores a broader vision of development that is both economically viable and environmentally responsible. As the BRI continues to evolve, it will undoubtedly shape the future of global construction, challenging norms and sparking debate on how we build for a sustainable tomorrow.
