China is hailing its decade-old Belt and Road Initiative (BRI) as an innovative model for economic development. A recent government report lauded the strategy but minimised criticisms that have accused it of burdening poor nations with excessive debt.
Chinese leader Xi Jinping’s BRI has facilitated the construction of ports, railways, power plants, and other schemes across the globe, generally funded through loans from Chinese development banks and predominantly implemented by Chinese construction companies. The initiative’s central objective is to enhance trade and stimulate investment by strengthening China’s transport connection with the rest of the world.
Li Kexin, the top official for international economics affairs in the Foreign Ministry, advocates the BRI as a novel approach to international collaboration, rebuking the traditional mentality of geopolitical contests.
Analysts acknowledge the BRI’s contribution to the necessary funding of impoverished nations, but contend that this assistance is not without its costs. One study, published Monday by Boston University’s Global Development Policy Centre, reveals that the BRI had extended over US$330 billion in loans to developing nations by 2021, having surpassed the World Bank in some years.
However, the same research indicated that numerous nations are now battling with their collective debts and pointed out that Chinese-backed power plants release about 245 million tons of carbon dioxide annually.
China has seized the opportunity as the World Bank and other financial institutions retreat from infrastructure projects due to criticism over concerns about environmental impact and the displacement of local communities.
Despite receiving similar complaints, China is pivoting to focus more on smaller projects and renewable energy, including wind farms, solar power plants, and factories producing electric vehicle components and batteries. This change in direction is largely due to learning from the debt crises experienced by many nations and reduced lending capacity due to China’s slowing economy.
China’s primary planning agency reaffirms that the country will practice “the principle of sustainable debt” and collaborate with indebted nations to form “a sustainable and risk-controllable investment and financing system.”
The BRI is a tool for China to elevate its global standing and counteract U.S. condemnation of its governance and human rights violations. U.S. senators visiting China recently emphasized their commitment to “freedom and democratic principles,” signaling their intent to preserve their values vigorously.
Conversely, Chinese leaders argue that their governance model offers an alternative approach that accepts nations as they are. The report on the BRI proposed that the initiative offers a new path of globalization, contrasting the current trend that has merely expanded the wealth gap between rich and poor countries.
Lastly, the report argued against a few nations’ domination over global economic development and control of established economic norms. China is anticipated to host a forum next week to highlight the BRI’s successes.
