From lender to partner: China’s BRI 2.0 is harder for the West to contain

China’s Belt and Road Initiative (BRI) hit a record US$124 billion in construction contracts and investment contracts in the first half of this year, surpassing the total for 2024. Paired with the Global Development Initiative (GDI), Beijing’s sustainability-focused rebranding of its global outreach, the BRI has evolved into a market-led framework advancing green industrialisation and technological integration.

Nowhere is this transformation clearer than in the Middle East and North Africa (MENA) region, where countries such as Morocco, Saudi Arabia, the United Arab Emirates (UAE) and Egypt have emerged as pivotal “connector economies” linking China to Africa, Europe and the broader Global South. 

When Chinese President Xi Jinping launched the BRI in 2013, it was conceived as an ambitious infrastructure strategy linking Asia, Europe and Africa through a lattice of ports, railways, pipelines and industrial zones. By the end of 2023, the initiative had expanded to more than 150 countries and exceeded US$1 trillion in cumulative engagement.

Mounting debt distress in partner countries, criticism over environmental degradation and China’s own domestic slowdown prompted a recalibration. The Covid-19 pandemic, coupled with intensifying US-China trade tensions, exposed the fragility of overreliance on sovereign lending and state-driven projects. 

Over the past several years, this shift has crystallised into what many analysts describe as “BRI 2.0”. Reports by HSBC Global Research and Fudan University’s Green Finance & Development Centre show that while overall BRI engagement surged, the average project size shrank from US$500 million to US$400 million.

At the same time, the share of private sector capital rose dramatically, from 15% in 2015 to nearly 60% in 2025. The focus had pivoted from building roads and ports to constructing solar farms, battery plants and digital corridors, aligning China’s global investments with its domestic green industrial strategy.

This marks the inflection point of the BRI, transforming it from a vehicle of physical connectivity into a platform for green industrial globalisation.

If the BRI’s metamorphosis represents a material reorientation, the GDI embodies its rhetorical and diplomatic counterpart. Introduced by Xi Jinping during his 2021 UN General Assembly address, the GDI articulated a vision of global cooperation grounded in sustainable growth and multilateral inclusivity. 

The GDI signalled a deliberate soft power recalibration. By foregrounding sustainability, digital inclusion and the UN Sustainable Development Goals, China sought to reposition itself not as a creditor superpower, but as a partner in development. This rhetorical turn also served a strategic purpose. It countered Western narratives of “debt-trap diplomacy”, while legitimising China’s green industrial expansion as a contribution to the global public good.

Domestically, the GDI dovetails with structural imperatives. Confronted with industrial overcapacity in solar panels, electric vehicles and batteries, China has a strong incentive to export its green industries. Framing this outward push in the language of global partnership allows Beijing to pursue its economic interests under the banner of shared sustainability. In effect, the GDI is the normative architecture of BRI 2.0 — turning necessity into virtue and strategy into principle.

At its core, the reimagined BRI reflects a shift from sovereign lending to foreign direct investment (FDI), from state-led construction to private-sector industrial co-production. The sectors now driving engagement illustrate the depth of the transformation.

According to joint data from Fudan University and the Griffith Asia Institute, 64% of BRI energy projects in the first half of 2025 were renewable, the highest share since the initiative’s inception. Chinese construction and investment contracts reached US$124 billion in that period, with green energy projects alone totalling US$9.7 billion, and more than 11.9 gigawatts of renewable capacity installed.

This evolution reflects both push and pull factors. Domestically, China’s renewable manufacturing juggernaut — led by firms like Longi Green Energy, Gotion High-Tech, and Huayou Cobalt — is producing far beyond domestic demand. Internationally, Western tariffs and supply chain diversification policies have made it advantageous for Chinese firms to relocate production to countries with preferential trade access to Western markets.

The result is the emergence of a low-carbon industrial ecosystem that fuses Chinese technology and finance with host-country resources and geography. The BRI’s second decade is therefore less about lending and more about building ecosystems that integrate supply chains, digital networks and industrial clusters to entrench Chinese standards and know-how globally.

In this reconfigured landscape, “connector countries” occupy a pivotal role, linking markets across continents and facilitating the flow of capital, goods and technology. The MENA region serves as a laboratory for observing how China’s pursuit of green industrialisation and logistical connectivity is reshaping traditional North–South and East–West linkages.

Morocco: a green gateway between Africa and Europe

Morocco epitomises the new face of BRI engagement, driven by industrial collaboration, renewable energy and strategic geography. Ranked among the top ten BRI destinations by project count and the second-largest by investment in 2025, Morocco leverages exceptional solar and wind resources to position itself as a “middle energy power”.

Morocco’s industrial ascent partly rests on green manufacturing partnerships with China. The Tangier Tech City, a US$10 billion smart-industrial hub, anchors Chinese investment in automotive and battery production. Battery-material manufacturing has become the leading sector for Chinese green-tech investment, exemplified by Gotion High-Tech’s planned gigafactory in Kenitra, Africa’s first large-scale EV battery plant. Beyond batteries, Chinese firms are expanding into solar, wind and green-hydrogen projects, including six government-approved hydrogen initiatives and a UEG-China Three Gorges consortium planning to produce ammonia.

These projects are not merely about export diversification. Morocco’s free trade agreements with both the EU and the US position it as a potential manufacturing and re-export base for Chinese firms aiming to navigate Western trade barriers. In this sense, Morocco offers a platform from which Chinese green technologies could, over time, reach European markets through localised production and joint ventures operating under Moroccan trade privileges.

Through such collaborations, China strengthens its industrial presence and technology diffusion abroad, while Morocco gains infrastructure, capital and technological capacity. This evolving partnership underscores the pragmatic logic of the BRI-GDI nexus, positioning Morocco as an emerging — though not yet assured — green-industrial bridge between Africa and Europe.

Saudi Arabia: from petrostate to clean-tech powerhouse

Saudi Arabia’s transformation within China’s BRI framework illustrates the geopolitical sophistication of BRI 2.0. Once defined by oil-for-infrastructure trade, Sino-Saudi relations now extend into hydrogen production, renewable energy and digital ecosystems.

In the first half of 2025, Saudi Arabia was the largest BRI recipient in the Middle East, drawing US$7.2 billion in new Chinese construction projects. Chinese involvement spans both project development and industrial localisation. Chint Solar (Zhejiang), in partnership with Mahindra Susten, delivered the Sakaka Solar PV Park, while Huawei supplied its advanced PV equipment. Jinko Solar, TCL Zhonghuan and Envision Energy joined forces with the Saudi Private Investment Fund (PIF) to localise the manufacturing and assembly of solar and wind power equipment and components, while LONGi Solar partnered with King Abdullah University of Science and Technology to improve the efficiency and reliability of photovoltaic technologies.

This alignment is not coincidental. It dovetails seamlessly with Vision 2030, Saudi Arabia’s blueprint for economic diversification and technological modernisation. By partnering with China, Riyadh not only hedges against Western policy volatility but also localises clean-energy production at scale.

For Beijing, the partnership serves multiple ends: it deepens China’s foothold in a region critical to its energy security, embeds its technology in the Gulf’s post-oil transition and demonstrates how the BRI’s new green-industrial logic can coexist with traditional energy geopolitics. The Sino-Saudi relationship has thus evolved into a two-way energy compact — oil for technology, hydrocarbons for hydrogen — binding the world’s largest oil exporter with its most ambitious energy transition architect.

United Arab Emirates: digital and financial connector

If Morocco is the industrial bridge and Saudi Arabia the energy co-producer, the UAE is the digital and financial hinge of China’s MENA engagement. With its advanced infrastructure, business-friendly regulations and global trade linkages, the UAE functions as the connective tissue of the emerging China-MENA network.

Under the BRI, the UAE hosts two of the most important maritime and logistics hubs for Chinese trade — Jebel Ali Port and Khalifa Port — both integrated into China’s Maritime Silk Road. Yet Beijing’s engagement has increasingly moved beyond ports to platforms, with Emirati partnerships in artificial intelligence, cloud computing and digital logistics.

Chinese firms such as Huawei Cloud and ByteDance have expanded operations in the UAE, positioning Dubai and Abu Dhabi as regional data and technology centres. The UAE’s proactive regulatory environment and fintech-friendly policies have helped nurture these developments, fostering a vibrant ecosystem for AI, e-commerce and digital payment innovations. 

At the same time, the UAE’s growing role as a renminbi clearing hub, supported by bilateral currency swap agreements and RMB-settled energy trade, has cemented its place as China’s financial gateway to the Middle East and Africa. This financial cooperation includes landmark initiatives such as the partnership between China’s Cross-Border Interbank Payment System (CIPS) and the UAE Central Bank to enable direct RMB settlements, reducing transaction costs and enhancing financial resilience between the two markets.

By blending digital connectivity with financial intermediation, the UAE anchors the Digital Silk Road, complementing China’s physical and industrial corridors and securing Beijing a strategic stake in the region’s digital transformation.

Egypt: maritime bridge and industrial gateway

Egypt occupies a unique position at the confluence of China’s logistics ambitions and regional industrial strategy. The country’s pivotal geography, straddling Asia, Africa and Europe, makes it indispensable to Beijing’s vision of integrated connectivity. 

The Suez Canal Economic Zone (SCZone) lies at the heart of this partnership. Chinese investments in the SCZone, including a US$100 million deal signed in mid-2025 to expand it, have turned the area into a flourishing hub for light manufacturing, electronics, and green energy components. Construction of a US$1 billion tire manufacturing facility by China’s Sailun Group began this year. 

Other investments include Xinyi Glass Holding’s US$700 million PV glass plant, announced last April, which will integrate local production into China’s renewable value chains. Likewise, JA Solar, TBEA and China National Chemical Engineering Corporation (CNCEC) — all private Chinese companies — are engaged in broadening Egypt’s renewable energy capabilities and supporting factory localisation. The accelerating pace of Chinese investment in Egypt reflects the government’s April opening of a direct RMB investment channel and new preferential policies, providing highly favourable conditions for Chinese companies.

For Egypt, these partnerships advance the national goal of becoming a regional industrial hub and logistics platform; for China, they ensure control over one of the world’s most critical maritime arteries. In a broader sense, Egypt illustrates how BRI 2.0 intertwines economic and geopolitical logics — translating geography into influence through a blend of investment, infrastructure and institutional presence.

The experiences of Morocco, Saudi Arabia, the UAE and Egypt reveal the contours of a new Chinese globalisation — one that is networked rather than hierarchical, private-sector-led rather than state-financed, and green rather than carbon-intensive.

Through these partnerships, Beijing embeds itself in host economies not primarily as a lender, but as a co-developer of industries and technologies. The result is a subtler, more enduring form of influence — an embedded interdependence that fuses economic pragmatism with strategic foresight.

This approach carries multiple advantages. For China, it sustains outward investment despite domestic headwinds and Western trade barriers, while ensuring that Chinese standards, technologies and supply chains remain integral to the global economy. For host countries, it delivers capital, expertise and new industrial capacities, though it also generates asymmetries of technological control. In solar, batteries and digital infrastructure, Chinese firms dominate the upstream and midstream, making partners dependent on their inputs and systems.

For Western powers, this new iteration of the BRI presents a harder target. It is no longer a state-driven, loan-heavy enterprise that can be criticised as coercive, predatory or unsustainable. Instead, it operates through market mechanisms and green goals, making it politically palatable even in pro-Western economies. By embedding itself in open, trade-oriented environments such as Morocco and the UAE, Beijing effectively sidesteps Western containment while expanding its global technological footprint.

Still, challenges persist. Environmental and labour standards vary widely; cyber vulnerabilities in digital infrastructure raise security risks; and political instability in several MENA states could disrupt long-term projects. Yet the flexibility of the BRI-GDI complex — its ability to adjust, rebrand and realign — gives it resilience that few Western alternatives can match.

The BRI has matured into something more complex, networked and adaptive than its originators could have imagined. Through the GDI, Beijing has recast its global role from that of a builder of roads to a broker of green and digital growth. What began as a state-centric enterprise of physical infrastructure has evolved into a multi-tiered system of industrial ecosystems, financial integration and strategic co-development.

In the MENA region, Morocco, Saudi Arabia, the UAE and Egypt exemplify the full spectrum of this transformation. Each connects China’s technological capacity with regional modernisation agendas: Morocco as a green manufacturing base, Saudi Arabia as a clean energy producer, the UAE as a digital financial hub and Egypt as a maritime-industrial bridge. Together, they demonstrate how the BRI’s second phase leverages connectivity not as a means of control, but as a mechanism of mutual embedding where China and its partners become structurally interlinked in energy, industry and data.

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