BEIJING (AP) – China’s Belt and Road Initiative looks set to be smaller and greener than its post-war counterpart. A large-scale project spanning 10 years It promoted trade, but left behind large debts and raised environmental concerns.
Leaders in developing countries drive change descending on beijing This week marks the start of a government-sponsored forum known as BRI for short.
This initiative would build power plants, roads, railways, and ports around the world, including China, Africa, Asia, latin america And the Middle East.it is a major part of Chinese calls for China to play a greater role in world affairs.
What is BRI?
The Belt and Road Initiative, known in Chinese as “One Belt, One Road,” began as a program for Chinese companies to build transportation, energy and other infrastructure overseas, funded by loans from the China Development Bank.
The stated goal was to grow trade and the economy by improving China’s connections with the rest of the world in a 21st century version of the Silk Road trade route from China to the Middle East and Europe. .
Xi outlined the idea during a visit to Kazakhstan and Indonesia in 2013, and it has taken shape over the next few years, pushing for construction of large-scale projects ranging from railways in Kenya and Laos to power plants in Pakistan and Indonesia. did.
how big is it?
A total of 152 countries have signed Belt and Road Agreements with China, but Italy is the only Western European country to do so. expected to fall off At the time of update in March next year.
Alessia Amighini, an analyst at Italian think tank ISPI, said that since Italy joined in 2019, its trade deficit with China has more than doubled and “Italy has suffered a net loss.” .
Under the Belt and Road Initiative, China has become a major financier of development projects alongside the World Bank. The Chinese government says more than 3,000 projects totaling nearly $1 trillion have been launched in Belt and Road countries.
Kevin Gallagher, global director at Boston University, has faced criticism for the impact large-scale building projects have on the environment and local communities, and the hole created by other financial institutions’ shift from infrastructure to areas such as health care and education. He said that China had filled it. Development Policy Center.
Chinese-funded projects have faced similar criticism, from displacing populations to adding large amounts of climate-changing greenhouse gases to the atmosphere.
What about the debt trap?
China’s development banks provided financing for Belt and Road projects, but some governments have been unable to repay them.
This echoes claims by the United States and others that China engages in “debt trap” diplomacy, where governments make loans knowing they will default, allowing Chinese interests to control assets. connected to. An often cited example is the port of Sri Lanka, which the government ended up leasing to a Chinese company for 99 years.
Many economists argue that China did not intentionally create bad loans. Currently, the China Development Bank is withdrawing from the bank after a bitter experience with defaults. China’s development lending has already fallen sharply in recent years as banks have become cautious about lending and many recipient countries have already had high levels of debt, making it difficult to borrow.
Chinese financing is the main contribution huge debt burden It is weighing on the economies of countries such as Zambia and Pakistan. Sri Lanka said last week: an agreement was reached It discussed key terms and principles for a debt restructuring with the Export-Import Bank of China, which aims to emerge from the economic crisis that brought down the government last year.
What’s next for BRI?
Future Belt and Road projects are not only likely to be smaller and more environmentally friendly, but also more likely to rely on investment by Chinese companies rather than government development financing.
Christoph Nedpil, director of the Asia Institute at Australia’s Griffith University, said China will continue to develop several projects, including high-profile projects such as railways, and projects such as oil and gas pipelines that have enough revenue streams to repay investments. We are thinking of starting a large-scale project.
A recent example is the opening of a Chinese high-speed railway in Indonesia, which became a hot topic in both countries.
Regarding climate change, although China has pledged to stop building coal-fired power plants overseas, it is still involved in some and is encouraging projects related to the green transition, Nedpil said. Stated. These range from wind and solar farms to electric vehicle battery factories. stir up environmental problems Belt and Road Partner Hungary.
___
Associated Press Business Writer Colleen Barry in Milan contributed to this report.
