The China Belt and Road Initiative: The Struggles and Opportunities for the SMEs Development of an Emerging Economy

Abstract

Following the economic crisis in 2008, several Algerian small and medium-sized enterprises (SMEs) in key economic sectors were negatively affected. More than 30,000 companies closed in a single year and more than 70,000 jobs were lost as a result of the financial crisis. These negative effects led to several bankruptcies and a deterioration in business management. The government’s efforts to address the crisis include an important measure to promote SME development under the China–Algeria Belt and Road Initiative (BRI). However, there are divided concerns with regard to the impact of the BRI, which seems to reflect on both prospects and challenges for SME development. Therefore, this study aims to explore the struggles and opportunities of BRI projects in the development of local SMEs in Algeria. In this study, a combination of face-to-face interviews and focus group discussions are conducted with 20 participants. The target group includes general managers, CEOs, entrepreneurs and managers of SMEs. All interviews were recorded face-to-face, later transcribed, translated and thematically analysed. The results show that the BRI has positive impacts on SME development, which reflect on economic opportunities, namely, trade partnerships, market efficiency and productivity, and improve employment opportunities. However, the dominance of Chinese enterprises and the lack of appropriate enterprise policies are among the challenges that hinder the rapid development of SMEs. Therefore, policy reform is needed to ensure the enforcement of foreign enterprise policies that limit the dominance of foreign enterprises and instead encourage the expansion of local enterprises to promote socio-economic growth.