Commodities & Futures China's Belt and Road plans losing momentum as opposition,...

China’s Belt and Road plans losing momentum as opposition, debt mount -study

-

Commodities17 minutes ago (Sep 29, 2021 05:05AM ET)

(C) Reuters. FILE PHOTO: Visitors walk past a wall with a map showing the species of peony in Belt and Road Initiative (BRI) countries, at horticultural exhibition Beijing Expo 2019, in Beijing, China April 29, 2019. Picture taken April 29, 2019. REUTERS/Stringer

By David Stanway

SHANGHAI (Reuters) – China’s vast Belt and Road Initiative (BRI) is in danger of losing momentum as opposition in targeted countries rises and debts mount, paving the way for rival schemes to squeeze Beijing out, a new study showed on Wednesday.

President Xi Jinping launched BRI in 2013 to use China’s strengths in financing and infrastructure construction to “build a broad community of shared interests” throughout Asia, Africa and Latin America.

But Xi’s “project of the century” is now facing major challenges and significant backlashes abroad, according to a study by AidData https://www.aiddata.org/publications/banking-on-the-belt-and-road, a research lab at the College of William and Mary in the United States.

“A growing number of policy makers in low- and middle-income countries are mothballing high profile BRI projects because of overpricing, corruption and debt sustainability concerns,” said Brad Parks, one of the study’s authors.

AidData said $11.58 billion in projects in Malaysia have been cancelled over 2013-2021, with nearly $1.5 billion cancelled in Kazakhstan and more than a $1 billion in Bolivia.

China’s foreign ministry did not immediately respond to a request for comment on Wednesday.

He Lingxiao, spokesperson for the China-led Asian Infrastructure Investment Bank, which is closely linked to the BRI, said “we believe the overarching principles of BRI are sound”.

“How these principles will be translated into operational reality is where we advocate for high international standards,” He said.

The AidData study looked at 13,427 Chinese-backed projects in 165 countries over 18 years, worth $843 billion in total, and noted that Beijing’s annual international development finance commitments are now double those of the United States.

But major changes in public sentiment made it difficult for participating countries to maintain close relations with Beijing, Parks said.

The study said an increasing number of China-backed projects have been suspended or cancelled since BRI’s 2013 launch, with evidence of “buyer’s remorse” in countries as far afield as Kazakhstan, Costa Rica and Cameroon.

Credit risks have also increased, with the exposure to Chinese debt now exceeding 10% of GDP in many low- and middle-income countries.

The survey found that 35% of Belt and Road projects were struggling with corruption, labour violations, environmental pollution and public protests.

In June this year, the United States announced a rival G7 initiative known as Build Back Better World (B3W) to provide financial support for developing nations to build infrastructure.

“B3W is going to increase choice in the infrastructure financing market, which could lead to some high-profile BRI defections,” Parks said.

AidData’s study received funding from a diverse group of private and public organizations, including the Ford Foundation and the U.S. Agency for International Development (USAID).

It said its research is independent and transparent and not guided or determined by its funders.

(Corrects spokesman to spokesperson in paragraph 7)

China’s Belt and Road plans losing momentum as opposition, debt mount -study

Latest news

ASEAN excludes Myanmar junta leader from summit in rare move

World27 minutes ago (Oct 16, 2021 07:50AM ET) 2/2 (C) Reuters. FILE PHOTO: Flags are seen outside the Association of Southeast...

Biden to attend memorial service honoring U.S. law enforcement officers

World8 minutes ago (Oct 16, 2021 07:10AM ET) (C) Reuters. FILE PHOTO: U.S. President Joe Biden and first lady Dr....

Russia seeing record gas demand but still ready to boost EU supplies, Novak says

Commodities23 minutes ago (Oct 16, 2021 06:56AM ET) (C) Reuters. FILE PHOTO: Flames from a gas burner are reflected on...

Attackers Behind Trickbot Expanding Malware Distribution Channels

The operators behind the pernicious TrickBot malware have resurfaced with new tricks that aim to increase its foothold by...

Subscribe here

UK PM Johnson visits church where lawmaker was stabbed to death

World15 minutes ago (Oct 16, 2021 06:03AM ET) 5/5 (C) Reuters. Britain's Labour Party leader Keir Starmer, Prime Minister Boris Johnson...

NASA launches first space probe to study Jupiter’s Trojan asteroids

Stock Markets17 minutes ago (Oct 16, 2021 06:01AM ET) 5/5 (C) Reuters. The capsule with NASA's Lucy spacecraft, atop a United...

You might also likeRELATED
Recommended to you