China’s Belt and Road Initiative is losing momentum, even after spending twice as much as us: Survey

  • China spends a lot of money on its belt and road initiative, but it risks losing its momentum, a study found.
  • Host countries cancel or suspend mega-projects due to concerns about corruption and incur debt to China.
  • 35% of all Belt and Road projects were affected by major issues, found research laboratory Aid Data.

China’s Belt and Road Initiative – an ambitious program to build projects in more than 100 countries around the world and expand its global influence – is now being met with opposition from its hosts, even though it spends the United States two on one on foreign development, according to a new study.

Host countries are canceling or suspending major projects due to fears of corruption, debt and overpricing, according to a report released Wednesday by Aid Data, a U.S.-based laboratory of the College of William and Mary.

This is despite the fact that China allocates an average of $ 85 billion a year to overseas development, compared to $ 37 billion from the US per capita. Aid Data.

The Belt and Road Initiative, announced in 2013 by Chinese leader Xi Jinping, aims to create a new Silk Road across Asia, Europe, Latin America and Africa by funding railways, ports and hospitals in low- and middle-income countries. Critics say it often engages these countries in debt-trap diplomacy, with China extracting political concessions from governments that owe it money.

To date, China has $ 13.427 billion worth of $ 843 billion in 165 countries, according to Aid Data.

2 22 19 Belt and roadmap

China wants to rebuild the Silk Road by financing major projects abroad.

Yutong Yuan / Business Insider

Its pace of development progressed so rapidly that Washington began to creep in to respond in 2019 with its own global push.

But since the initiative began, Malaysia has canceled $ 11.6 billion worth of infrastructure projects, according to China, according to researchers. These include a rail link on the east coast and two gas pipelines constructed by the then newly elected prime minister in 2018.

Kazakhstan and Bolivia canceled $ 1.5 billion and $ 1 billion in projects, respectively, while Costa Rica, Sudan, Ethiopia, Ecuador, Zambia and Cameroon have suspended or canceled a total of $ 3.3 billion in projects.

Part of their concern about China’s Belt and Road push is from the steep debt burden they incur by collaborating with Beijing; 42 countries have debts to China equivalent to more than 10% of their GDP, the researchers report.

There are also concerns about corruption. At least 47 projects worth a total of $ 41.2 billion in 10 countries have been marked with allegations of corruption scandals, controversies or alleged violations per se. Assistance data.

The researchers also pointed out that 35% of all Belt and Road projects were affected by some kind of problem such as corruption scandals, labor violations, environmental hazards and public protests.

They wrote that it is still unclear whether “buyer remorse” among these host countries will affect China’s program in the long run.

“However, it is becoming increasingly clear that Beijing will need to address host countries’ concerns in order to maintain support for the Belt and Road Initiative,” the report said.

And Belt and Road will soon be competing. In June, the G7 announced the “Build Back Better World” initiative, which will spend hundreds of billions to develop infrastructure worldwide — a direct challenge to China’s billion-dollar shock.

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