Page 26 - Echoes of the Global South V2

Strategic Economic Behaviour and
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Geoeconomic Influence of the Global South

As the Global South emerges as a critical player in the international system, key countries—China, India, Brazil, and
South Africa—have adopted distinct geoeconomic strategies to navigate the complexities of the global order. A closer
look at the individual strategies of these key countries underscores the different paths to geoeconomic influence
within the Global South. China’s infrastructure-driven and debt-leveraged model contrasts sharply with India’s more
diplomatic and cooperative approach that leverages capacity building, sift diplomacy, people-to-people exchanges
and cultural connect. On the other hand, Brazil’s resource diplomacy and regional integration efforts differ from South
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Africa’s focus on continental leadership and developmental diplomacy. These divergent strategies highlight the
flexibility and adaptability of Global South countries in pursuing their economic and geopolitical goals and also present
direct competition with the strategic interests of Western powers in the Global South.

4.1. Geoeconomic Strategies of Emerging Partners

a. China: The Belt and Road Initiative and Beyond
China’s geoeconomic strategy is perhaps the most prominent and expansive among Global South countries. The
Belt and Road Initiative (BRI), launched in 2013, is the cornerstone of China’s strategy to expand its influence across
Asia, Africa, Europe, and Latin America. The BRI aims to develop infrastructure, enhance trade connectivity, and foster
economic integration across participating countries. As of 2023, over 150 countries and 30 international organisations
had signed agreements with China under the BRI framework, involving more than US$1 trillion in total spending. 60

China finances and constructs infrastructure projects through the BRI such as roads, railways, ports, and energy facilities
in participating countries. These projects not only enhance trade routes but also create dependencies on Chinese
technology, labour, and capital. For example, the construction of the Mombasa-Nairobi Standard Gauge Railway in
Kenya, funded by Chinese loans, has significantly improved regional connectivity but has also raised concerns about
debt sustainability. This instance points to a critical aspect of China's strategy – its use of loans to secure long-term
influence. While these loans facilitate much-needed infrastructure development, they often come with high interest rates
and short repayment periods, leading to concerns about "debt-trap diplomacy." Sri Lanka's Hambantota Port is a case
in point, where the inability to repay Chinese loans resulted in a 99-year lease of the port to a Chinese company. 61

China has strategically invested in sectors crucial to its economic security, such as energy and minerals. For
instance, China's investments in African countries like Angola and Nigeria have focused on securing oil supplies,
while its investments in South America aim to access lithium and copper reserves critical for its technology sector.
China also complements its economic strategies with cultural and educational exchanges and financial aid. This
approach aims to build a positive image of China as a development partner, particularly in regions where Western
influence has historically been dominant.

The heavy reliance on Chinese loans has led to concerns about debt sustainability in many BRI countries. The
International Monetary Fund (IMF) has warned that several countries participating in the BRI are at risk of debt
distress. Moreover, China's growing influence through the BRI has raised concerns among other major powers,
particularly the United States and India, striving to exert their influence in the Global South, leading to increased
geopolitical tensions. The Indo-Pacific strategy led by the US and Japan is seen as a counter to China’s expanding
influence in the region. In fact, in some countries, there has also been local resistance to Chinese projects, often due
to concerns about environmental impact, labour practices, and the perceived erosion of sovereignty. 62

59. Fernanda Magnotta, “A Balancing Act for Brazil’s Foreign Policy”, Americas Quarterly, February 05, 2024, https://www.americasquarterly.org/article/a-
balancing-act-for-brazils-foreign-policy/
60. Spencer Feingold, “China’s Belt and Road Initiative turns 10. Here’s what to know”, World Economic Forum, November 20, 2023, https://www.weforum.
org/agenda/2023/11/china-belt-road-initiative-trade-bri-silk-road/
61. Jonathan E. Hillman, “Game of Loans: How China Bought Hambantota”, Center for Strategic and International Studies, April 2, 2018, https://www.csis.
org/analysis/game-loans-how-china-bought-hambantota#:~:text=Unable%20to%20repay%20its%20debt%2C%20Sri%20Lanka%20gave,that%20it%20
could%20become%20a%20Chinese%20naval%20facility.
62. Lingfei Weng, Lan Xue, Jeffrey Sayer, Rebecca Anne Riggs, James Douglas Langston, Agni Klintuni Boedhihartono, “Challenges faced by Chinese firms
implementing the ‘Belt and Road Initiative’: Evidence from three railway projects”, Research in Globalization, Volume 3, 2021, https://doi.org/10.1016/j.
resglo.2021.100074

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