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

China's Belt and Road plans losing momentum as opposition, debt mount -study
China's Belt and Road plans losing momentum as opposition, debt mount -study   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By David Stanway</p> <p><span class="caps">SHANGHAI</span> -China’s vast Belt and Road Initiative (<span class="caps">BRI</span>) 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. </p> <p>President Xi Jinping launched <span class="caps">BRI</span> in 2013, aiming to harness China’s strengths in financing and infrastructure construction to “build a broad community of shared interests” throughout Asia, Africa and Latin America. </p> <p>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. </p> <p>“A growing number of policymakers in low- and middle-income countries are mothballing high profile <span class="caps">BRI</span> projects because of overpricing, corruption and debt sustainability concerns,” said Brad Parks, one of the study’s authors. </p> <p>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. </p> <p>China’s foreign ministry said in a statement that “not all debts are unsustainable”, adding that since its launch the <span class="caps">BRI</span> had “consistently upheld principles of shared consultation, shared contributions and shared benefits”.</p> <p>Many partner countries say the initiative has made a positive contribution to local economic development, it added. </p> <p>‘<span class="caps">SOUND</span>’ <span class="caps">PRINCIPLES</span></p> <p>He Lingxiao, spokesperson for the China-led Asian Infrastructure Investment Bank, which is closely linked to the <span class="caps">BRI</span>, said “the overarching principles of <span class="caps">BRI</span> are sound”. </p> <p>“How these principles will be translated into operational reality is where we advocate for high international standards,” He said. </p> <p>The AidData study looked at 13,427 China-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. </p> <p>But major changes in public sentiment make it difficult for participating countries to maintain close relations with Beijing, Parks said. </p> <p>The study said an increasing number of China-backed projects have been suspended or cancelled since <span class="caps">BRI</span>’s 2013 launch, with evidence of “buyer’s remorse” in countries as far afield as Kazakhstan, Costa Rica and Cameroon. </p> <p>Credit risks have also increased, with the exposure to Chinese debt now exceeding 10% of gross domestic product (<span class="caps">GDP</span>) in many low- and middle-income countries. </p> <p>The survey found that 35% of Belt and Road projects were struggling with corruption, labour violations, environmental pollution and public protests. </p> <p>In June, 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. </p> <p>“B3W is going to increase choice in the infrastructure financing market, which could lead to some high-profile <span class="caps">BRI</span> defections,” Parks said. </p> <p>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 (<span class="caps">USAID</span>). </p> <p>It said its research is independent and transparent and not guided or determined by its funders. </p> </div>