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.
CREDIT-GRABBER: China said its coast guard rescued the crew of a fishing vessel that caught fire, who were actually rescued by a nearby Taiwanese boat and the CGA Maritime search and rescue operations do not have borders, and China should not use a shipwreck to infringe upon Taiwanese sovereignty, the Coast Guard Administration (CGA) said yesterday. The coast guard made the statement in response to the China Coast Guard (CCG) saying it saved a Taiwanese fishing boat. The Chuan Yu No. 6 (全漁6號), a fishing vessel registered in Keelung, on Thursday caught fire and sank in waters northeast of Diaoyutai Islands (釣魚台). The vessel left Keelung’s Badouzih Fishing Harbor (八斗子漁港) at 3:35pm on Sunday last week, with seven people on board — a 62-year-old Taiwanese captain surnamed Chang (張) and six
RISKY BUSINESS: The ‘incentives’ include initiatives that get suspended for no reason, creating uncertainty and resulting in considerable losses for Taiwanese, the MAC said China’s “incentives” failed to sway sentiment in Taiwan, as willingness to work in China hit a record low of 1.6 percent, a Ministry of Labor survey showed. The Directorate-General of Budget, Accounting and Statistics (DGBAS) also reported that the number of Taiwanese workers in China has nearly halved from a peak of 430,000 in 2012 to an estimated 231,000 in 2024. That marked a new low in the proportion of Taiwanese going abroad to work. The ministry’s annual survey on “Labor Life and Employment Status” includes questions respondents’ willingness to seek employment overseas. Willingness to work in China has steadily declined from
The number of pet cats in Taiwan surpassed that of pet dogs for the first time last year, reaching 1,742,033, a 32.8 percent increase from 2023, the Ministry of Agriculture said yesterday, citing a survey. By contrast, the number of pet dogs declined slightly by 1.2 percent over the same period to 1,462,528, the ministry said. Despite the shift, households with dogs still slightly outnumber those with cats by 1.2 percent. However, while the number of households with multiple dogs has remained relatively stable, households keeping more than two cats have increased, contributing to the overall rise in the feline population. The trend
The Legislative Yuan’s Finance Committee yesterday approved proposed amendments to the Amusement Tax Act (娛樂稅法) that would abolish taxes on films, cultural activities and competitive sporting events, retaining the fee only for dance halls and golf courses. The proposed changes would set the maximum tax rate for dance halls and golf courses at 50 and 20 percent respectively, with local governments authorized to suspend the levies. Article 2 of the act says that “amusement tax shall be levied on tickets sold or fees charged by amusement places, facilities or activities” in six categories: “Cinema; professional singing, story-telling, dancing, circus, magic show, acrobatics
RSS