China’s massive and expanding Belt and Road trade infrastructure project is running into speed bumps as some countries begin to grumble about being buried under Chinese debt.
First announced in 2013 by Chinese President Xi Jinping (習近平), the initiative also known as the “new Silk Road” envisions the construction of railways, roads and ports around the globe, with Beijing providing billions of dollars in loans to many countries.
Five years on, Xi has found himself defending his treasured idea as concerns grow that China is setting up debt traps in countries which might lack the means to pay back the Asian giant.
Photo: AP
“It is not a China club,” Xi said in a speech on Monday last week to mark the project’s anniversary, describing Belt and Road as an “open and inclusive” project.
China’s trade with Belt and Road countries had exceeded US$5 trillion, with outward direct investment surpassing US$60 billion, Xi said.
However, some are starting to wonder if it is worth the cost.
During a visit to Beijing last month, Malaysian Prime Minister Mahathir Mohamad said his country would shelve three China-backed projects, including a US$20 billion railway.
The party of Pakistan’s new Prime Minister Imran Khan has vowed more transparency amid fears about the country’s ability to repay Chinese loans related to the multibillion-dollar China-Pakistan Economic Corridor.
Meanwhile, the exiled leader of the opposition in the Maldives, Mohamed Nasheed, has said China’s actions in the Indian Ocean archipelago amounted to a “land grab” and “colonialism,” with 80 percent of its debt held by Beijing.
Sri Lanka has already paid a heavy price for being highly indebted to China.
Last year, the island nation had to grant a 99-year lease on a strategic port to Beijing over its inability to repay loans for the US$1.4 billion project.
“China does not have a very competent international bureaucracy in foreign aid, in expansion of soft power,” J Capital Research cofounder and research director Anne Stevenson-Yang told reporters.
“So, not surprisingly they’re not very good at it and it brought up political issues like Malaysia that nobody anticipated,” she said.
“As the RMB [yuan] becomes weaker, and China is perceived internationally as a more ambiguous partner, it’s more likely that the countries will take a more jaundiced eye on these projects,” she added.
The huge endeavor brings much-needed infrastructure improvements to developing countries, while giving China destinations to unload its industrial overcapacity and facilities to stock up on raw materials.
However, a study by the Center for Global Development, a US think tank, found “serious concerns” about the sustainability of the sovereign debt in eight countries receiving Belt and Road funds.
Those were Pakistan, Djibouti, Maldives, Mongolia, Laos, Montenegro, Tajikistan and Kyrgyzstan.
The cost of a China-Laos railway project — US$6.7 billion — represents almost half of the Southeast Asian country’s GDP, the study said.
In Djibouti, the IMF has said that the country faces a “high risk of debt distress” as its public debt jumped from half of GDP in 2014 to 85 percent in 2016.
Africa has long embraced Chinese investment, helping make Beijing the continent’s largest trading partner for the past decade.
A number of African leaders are to gather in Beijing today for a summit focused on economic ties which is to include talks on the Belt and Road program.
China bristled at criticism.
At a daily press briefing on Friday, Chinese Ministry of Foreign Affairs spokeswoman Hua Chunying (華春瑩) denied that Beijing was saddling its partners with onerous debt, saying that its loans to Sri Lanka and Pakistan were only a small part of those countries’ overall foreign debt.
NPP WARNING: The NPP’s chairman said that a security law proposed by Beijing means it has renounced its promise to maintain ‘one country, two systems’ in HK The Taiwan People’s Party (TPP) yesterday proposed changing the law to provide protection for those seeking political asylum. China at the opening of the National People’s Congress in Beijing on Thursday introduced a draft security law for Hong Kong to ban treason, subversion and sedition, with a review expected next week. TPP caucus whip Jang Chyi-lu (張其祿) said that the party is concerned about democracy advocates in Hong Kong and has taken action to support them. The party has proposed an amendment to Article 18 of the Act Governing Relations with Hong Kong and Macau (香港澳門關係條例), which stipulates that the government can offer
The number of people from Hong Kong applying for residency in Taiwan last year rose 41 percent from a year earlier to 5,858, National Immigration Agency statistics showed. The statistics also showed that 600 applications were filed by Hong Kong residents in the first quarter of this year — three times the number filed in the same period last year — with applicants apparently not deterred by the COVID-19 pandemic. Just one day after it was reported that the Chinese government plans to enact new national security laws in Hong Kong, inquiries regarding immigration to Taiwan grew 10-fold, a Hong Kong-based immigration
‘BEGINNING OF THE END’: Democracy advocate Joshua Wong urged Hong Kongers to stand up and fight, and let the Chinese government know that they will not cave Hong Kong protesters yesterday battled with riot police in busy downtown areas, showing their opposition toward China’s dramatic move to crack down on dissent in the biggest demonstration since the coronavirus swept through the territory in January. Police deployed a water cannon and fired tear gas in the Causeway Bay shopping area after hundreds of protesters had gathered to oppose new national security legislation from China. Police warned the crowd they were taking part in an illegal gathering, and later said in a statement that “rioters threw umbrellas, water bottles and other objects at them.” At least 120 people were arrested,
‘TAIWAN IS SAFE’: As there have been no new local cases for 42 days, people should feel free to travel around the nation — as long as they follow disease prevention rules No new cases of COVID-19 were reported yesterday and only 20 of the people hospitalized after testing positive are still being treated in hospitals, Minister of Health and Welfare Chen Shih-chung (陳時中) said yesterday in Pingtung County’s Kenting (墾丁) as he promoted a “new disease prevention lifestyle” for the nation. As yesterday was the 42nd consecutive day with no new domestic cases, and experts consider 28 consecutive days with no domestic case — the span of two incubation periods — a sign that a community is relatively safe, Taiwan is safe, said Chen, who heads the Central Epidemic Command Center (CECC),
RSS