[News Terms] China's Belt and Road Slows, US's 'Indo-Middle East-Europe Economic Corridor' Emerges

India, Middle East, and Europe United... US Moves to Counter China
Some Projects Canceled or Reduced Due to China's BRI Funding Issues

The 'India-Middle East-Europe Economic Corridor (IMEC)' is a project led by the United States to directly connect India and Europe through maritime and railway networks, aiming to facilitate the transportation of energy resources such as oil and other goods.

Starting from Mumbai, India, the corridor connects Dubai in the United Arab Emirates (UAE), Riyadh in Saudi Arabia, Haifa in Israel, and Piraeus in Greece, extending all the way to Italy. It consists of the 'Eastern Corridor,' linking India and the Arabian Gulf, and the 'Northern Corridor,' connecting the Arabian Gulf to Europe.

On September 9 last year, Italian Prime Minister Giorgia Meloni and President Joe Biden were having a conversation at the G20 summit held in New Delhi, India.
[Photo by AP/ Yonhap News]

The plan includes establishing a reliable and cost-effective cross-border ship-to-rail transshipment network, including new railway lines. This will complement existing maritime and land transportation routes, enabling the transshipment of goods and services from India through the UAE, Saudi Arabia, Jordan, and Israel to Europe.

The existing transport routes referred to here include the Suez Canal (Egypt), the International North-South Transport Corridor (INSTC) (Russia-Iran), and the Belt and Road Initiative (BRI). Through the IMEC project, participating countries expect benefits such as securing regional supply chains, increasing trade accessibility, improving trade facilitation, and strengthening ESG (Environmental, Social, and Governance) standards.

Following Russia's invasion of Ukraine in 2022, U.S. President Joe Biden advocated for the establishment of IMEC during the G20 summit held in New Delhi, India, in September 2023. Subsequently, the leaders of the United States, India, Saudi Arabia, UAE, France, Germany, Italy, and the European Union (EU) signed a memorandum of understanding to advance the project.

Notably, Italy signed the IMEC memorandum of understanding with the intention of withdrawing from China's Belt and Road Initiative (BRI), officially notifying China of its BRI withdrawal three months later.

At the New Delhi G20 summit, the IMEC project was openly presented as a new economic corridor uniting India, the Middle East, and Europe, effectively countering China's BRI.

Chinese President Xi Jinping (right) and Russian President Vladimir Putin shake hands before holding a separate meeting after the opening ceremony of the "3rd Belt and Road Forum for International Cooperation" held in Beijing, China, on October 18 last year.
[Photo by Sputnik News/ Yonhap News]

On the 28th, Hong Kong's South China Morning Post (SCMP) reported that China's Southeast Asia BRI projects are facing a funding shortfall of $52 billion (approximately 70.3 trillion KRW). Citing research from the Australian think tank Lowy Institute, the report stated that China requires $77 billion (about 104 trillion KRW) to advance 24 projects in Southeast Asia but currently faces a $52 billion deficit.

SCMP noted that the average progress of these 24 projects is around 33%, with some projects canceled or scaled down due to financial difficulties.

The Belt and Road Initiative was launched by Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit in November 2014. It is a China-centered economic zone concept connecting the Middle East, Europe, Southeast Asia, and Africa via land and sea routes. However, in recent years, China, facing economic downturns, has been criticized for scaling back or selectively proceeding with BRI projects citing funding shortages.

In contrast, although questions about efficiency have been raised, the IMEC project appears to be progressing steadily, offering potential reductions in cost and time compared to existing economic corridors and supply chains. On the 11th, Richard Verma, U.S. State Department Deputy Assistant Secretary for Operations and Finance, announced plans to invest $2 billion (about 2.6 trillion KRW) in international infrastructure over the next five years to effectively counter China's BRI. Analysts suggest that the IMEC project has been gaining momentum since its establishment last year.