These are surreal days. Speaking at a seminar to celebrate the fifth anniversary of his benchmark Belt and Road Initiative, President Xi Jinping stressed it was not just a “China club.”
On the contrary, it was “open” and “inclusive,” with a shiny new image for a shiny new era of “cooperation.”
“The Belt and Road is an economic cooperation initiative, not a geopolitical or military alliance,” Xi said in Beijing on Monday. “It is an open and inclusive process, and not about creating exclusive circles or a China club.”
Launched in a fanfare of state-media publicity by Xi in 2013, this epic project has become an extension of Beijing’s global ambitions and the centerpiece of its economic foreign policy.
At the heart of the program are a web of ‘New Silk Road’ superhighways, connecting China with 68 countries and 4.4 billion people across Asia, Africa, the Middle East and Europe in a maze of multi-trillion-dollar infrastructure projects.
“Beijing has invested more than US$60 billion in countries along the route, while trade volume has reached 5 trillion yuan ($734.29 billion), Xi confirmed in his speech, adding that about 200,000 ‘local jobs’ had been created in [BRI] countries,” the state-run China Daily reported.
Sheer scale
Yet during the past three months, questions have been raised about the sheer scale of this venture amid allegations that it is nothing more than “debt book diplomacy.”
Last week, new Malaysian Prime Minister Mahathir Mohamad pulled out of a major Beijing-inspired railway project because of the costs, following Myanmar’s decision to scale back plans for a port due to debt risks.
Elsewhere, Nepal has been trying to halt construction on two Chinese-built hydroelectric dams while a rail link through Laos could end up being worth half of its GDP.
Gareth Evans, the former foreign minister of Australia, has even claimed that Laos and Cambodia are now “wholly owned subsidiaries of China” after borrowing more than $5 billion.
In a report released earlier this year entitled Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective, the Center for Global Development revealed that 23 countries could be prone to “debt distress.”
Of the group, Pakistan, Djibouti, the Maldives, Laos, Mongolia, Montenegro, Tajikistan and Kyrgyzstan were rated in the “high risk” category.
“The Belt and Road Initiative provides something that countries desperately want – financing for infrastructure,” John Hurley, a visiting fellow at the Washington-based think tank and co-author of the study along with Scott Morris and Gailyn Portelance, said in a statement.
“But when it comes to this type of lending, there can be too much of a good thing,” he added.
A study written by Harvard scholars Sam Parker and Gabrielle Chefitz illustrated the dangers when they warned the US State Department in May of the impact of what are perceived to be cheap loans, calling it “debt book diplomacy.”
The International Monetary Fund was more restrained but just as concerned about the financial risks when Christine Lagarde, the managing director of the IMF, touched on the same subject in April during a visit to Beijing.
Since then, views have hardened. Indeed, there have been rumblings in the “international community” that the world’s second-largest economy is using the Belt and Road Initiative to increase its political and military influence in Southeast Asia and beyond.
At the same time, trade tensions between China and the United States have escalated with a series of tit-for-tat tariffs on imports and rhetoric reminiscent of the old Cold War days.
‘Enormous challenges’
“China is facing enormous challenges with these reactions from the [overseas] community,” Pang Zhongying, a foreign affairs specialist at the Ocean University of China, told the South China Morning Post. “Xi’s speech shows that [the leadership] has reflected on these developments and has made adjustments … and is trying to tone down its rhetoric.”
Still, it failed to stop Ning Jizhe, the vice-chairman of the powerful National Development Reform Commission, from wading into the controversy earlier this week.
He argued that the “New Silk Roads” were not “debts traps” and “high” financial risk in certain countries, such as Pakistan, were long-standing issues.
“The debt issues of some countries are not necessarily connected with the Belt and Road construction and relevant projects, as those countries have heavily borrowed from other [nations] and international financial organizations and thus are highly indebted,” he told a press conference at the Information Office of the State Council, the government’s de facto cabinet.
“China is a latecomer. It is not the biggest creditor,” he added.
While Ning raised valid points, they failed to appear in reports of Xi’s highly-profile speech. These are, indeed, surreal days.
Sorry Peter Seo. The US built the railroad in the interior west using Chinese labour and not acknowledging their contribution. After the railroad was built, these poor Chinese were taken to the wilderness and shot or they were loaded onto boats and pushed out into the Pacific Ocean.
The railroad, the indutrial town of Massachusetts, Harvard Univerisity, Yale, etc were financed by opium money stolen from China by Americans like the Delanos, the Forbes, the Astors who were opium runners in China.
After benefitting from China, the US enacted the Chinese Exclusion Act.
A similar situation is acting out today. Benefitting from the cheap good quality goods from China keeping inflation low and improving living standards, the US now starts a trade war against China.
See James Bradley " The China Mirage " in youtube.
Malaysian PM, Mahathir, did not pull out of the Beijing-backed railway. He is considering renegotiating the terms or deferring the project.
There was a similar project proposed in the late 1980s’ by a Japanese agency which Mahathir rejected. Najib, the previous PM revived this and incorporated it into the BRI.
The initial costing proposal by the Chinese contractor was very reasonable but Najib doubled it to benefit his cronies and to pay off debts incurred by the scandalous 1MDB fund.
So the railway was not initially proposed by the Chinese.
I am a Malaysian. I should know.
Unsurprisingly, western writers who know nothing of the details about Asian affairs project their prejudices and bias onto the region.
Another area where China received a lot of fake news from western writers is Africa and Brautigam from the John Hopkins Foundation has debunked all of them.
As far back as I can recall, China did not use force on other nations to feed her people, unlike the US who … (I am tired of repeating myself, but you already know what.)
Every country has to decide for itself whether it wants development. Development and progress means building infrastructure to facilitate growth. Otherwise the people would continue to languish in poverty and backwardness. The US conquered the interior west by building infrastucture, suppression and yes debt traps to the poor red indians. The British took over the treasury of Egypt when they could not repay the loans they took for modernisation in the 19th century. So is there any different or the moral judgement from the western scholars? Or you prefer to see others being poor and destitute begging for money from the western banks all the time?
Ken Nguyen, Get real, ever organism on the planet is predatory. The beneficent deity had a bad day.
Laughable.
You have a sick mind !
Art Laramee, Any currency can be used for trade, but the American has to introduce negativity to trade whenever they can interfere, in fact anything involves the American it will become toxic, sanctions, embargos, blockades, blackmails, extortions, highway robbery, etc. are the norm the American brings to the table. Keeping the American at ten feet barge pole is the best way to get things done.
With 1.4 billion mouths to feed & house, the country needs everything in the periodic table plus agricultural land and it’s organic products and China will employ every Machiavellian maneuver possible to fleece same from every poor ill-educated dictatorial country of their resources. All Hail this planetary cesspool. ✴✴✴
Laos will get a railroad and a chance for economic development. What did Greece get?
Recalling Deng Xiaoping’s, tao guang yang hui, or “keep a low profile”. Certainly not the approach of Xi Jinping and his BRI.
Does this mean the 68 countries can trade with dollars?
The Middle Kingdom continues to march forward———no matter what the doubters say!!