NEW DELHI: It was touted as the “project of the century” that would have catapulted China as an infrastructure behemoth, rivalling the economic might of United States.
But just a few years down the line, China’s $1 trillion Belt and Road Initiative (BRI) has stuttered and sputtered, with overall activity declining by almost 40% from its 2018 peak.

According to a report in Bloomberg, BRI’s momentum has tapered off in recent years amid accusations that China is an “irresponsible lender” driving countries to default.

In recent years, numerous reports have pointed in that direction.
China has been blamed by various think-tanks for pushing poor and middle income countries to the brink of economic default and leaving them with billion-dollar unfinished projects – known as “white elephants”.

Countries like Sri Lanka are the prime examples of China’s vociferous lending and ambigious debt plans.
Moreover, China’s fractured ties with US have made association with BRI – seen as President Xi Jinping‘s pet project – as increasingly divisive.

Recently, Italy, which was the sole G7 member to be a part of BRI, announced that it will exit the project by the end of 2023 since it failed to meet expectations.
“China’s role has shifted from being the world’s largest bilateral lender to also its largest debt collector,” the New York Times reported.
‘BRI in deep trouble’
A senior American official told Bloomberg that US thinks that BRI is deep trouble.
“Beijing has less capital to lend and pressure is growing to recoup the outstanding money it loaned,” the official said.
The numbers clearly back this.
According to New York Times, the Boston University’s Global Development Policy Center calculates that China’s issuance of overseas loans and other development finance peaked in 2016 at nearly $90 billion, then fell to less than $5 billion by 2021.
China has taken a hard line in negotiations over debt relief to countries like Sri Lanka, Suriname and Zambia.
The world will be watching closely as Xi hosts global leaders for a summit in Beijing where they are expected to pledge support for the program.


Russian President Vladimir Putin, Hungary’s Prime Minister Viktor Orban, Indonesian President Joko Widodo, Argentina’s President Alberto Fernandez and Thai Premier Srettha Thavisin are expected to attend the summit.
“Xi will invite his best friends and have all these people come together to celebrate. It’s a clear message that China is trying to have its own allies while challenging the US-led world order,” Alfred Wu, an associate professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy, told Bloomberg.
But as Xi tries to breathe new life into the sagging project, the question remains how it reached its tipping point in the first place.
Pandemic, politics, and other problems
The Covid pandemic that originated from China’s Wuhan also became a big roadblock for BRI.
The outbreak put the brakes on China’s infrastructure and trade initiative, as a global slowdown imperiled debtors’ ability to repay their loans, Bloomberg reported.
Notably, Zambia was the first African country to default during the pandemic in late 2020, putting China, the nation’s largest creditor, in the spotlight.
Soon after, other nations including Ethiopia, Sri Lanka and Pakistan fell into debt crises.
With that, the annual engagement under the BRI plummeted to $63.7 billion in the first year of the global health crisis, according to a study by the Green Finance and Development Center at Shanghai-based Fudan University — down from a peak of more than $120 billion in 2018.
“External shocks like the Ukraine war and, perhaps in the coming weeks the new war in the Middle East, are deepening debt and inflation burdens,” Michael Kugelman, director of the South Asia Institute at the Wilson Center, told Bloomberg.
Moreover, some countries have question questioned whether Xi’s flagship initiative brings economic benefits at all.


“We have exported a load of oranges to China, they have tripled their exports to Italy in three years,” Italy’s defense minister Guido Crosetto said in July. “Paris, without signing any treaties, in those days sold planes to Beijing for tens of billions.”
After Italy signed an agreement to cooperate on the BRI in 2019, its imports from China accelerated but that bump wasn’t reciprocated. Last year, Italian exports to China only rose 5%, lagging behind those of Germany and France — two countries that aren’t in the BRI.
This showed that participating countries witnessed a lopsided relationship with China.
Keeping his dream afloat
Xi’s efforts to position China as a leader in the developing world have served as a vital funding source for Global South nations. China provided $114 billion in development financing to Africa from 2013 to 2021, as per a Boston University study.
This spending has prompted the US and European governments to increase their engagement with some developing nations to counter China’s influence, although many of their pledged projects have faced delays.
China’s credit lines face a test as Kenya’s leader, William Ruto, is expected to request $1 billion for stalled infrastructure projects.
Wu Peng, the department director of African affairs at China’s Foreign Ministry, mentioned the announcement of a “big loan” for a new railway project in Africa.
While this won’t reverse the overall trend of a downsized Belt and Road Initiative (BRI), it underscores Xi’s ongoing commitment to the program as a cornerstone of his foreign policy.
Xi’s close association with the initiative ensures its continued significance, said Raffaello Pantucci, a senior fellow at the S Rajaratnam School of International Studies in Singapore.
Pantucci suggests that the initial pace may have been too rapid but emphasizes that the BRI will remain relevant as long as Xi is in power.
(With inputs from agencies)

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