The Kunming-Vientiane (K-V) railway, part of the Kunming-Singapore multi-country rail network (or “Pan-Asia Railway”), is an anchor investment of the Chinese government’s Belt and Road initiative (BRI). This case study will assess the rail project along four dimensions: economic implications; procurement arrangements; labor; and environmental and social safeguards. In each of these areas, evidence from the railway project suggests that Chinese policy and practice could be better aligned with the practices of other sources of multilateral and bilateral development finance. Where the project’s standards are broadly aligned, at least in principle, there is nonetheless reason to believe that China’s approach carries heightened risks given the overall scale of financing.
These risks hold for China’s global program of official finance, which has made the country the largest source of official credit in the world. In this regard, BRI policymakers should consider a more rigorous set of “best practices” that align Chinese official finance with leading multilateral standards, even if these practices don’t currently characterize many other bilateral lenders. Such an approach would be consistent with the multilateral vision for BRI espoused by Chinese officials and reflected in the framework of the annual Belt and Road Forum for International Cooperation. This study considers what a stronger set of standards would look like in the context of the four areas of focus.
