Debt mountains, smoke-stacked power stations and environmental vandalism litter China’s New Silk Roads.
Billed as a US$1 trillion global infrastructure lifeline for developing nations, the Belt and Road Initiative has been at the heart of President Xi Jinping’s foreign policy.
But now the belt is rusting from the fallout of polluted projects and the road is strewn with victims crippled by massive loans.
“A growing number of policymakers in low- and middle-income countries are mothballing high profile BRI projects because of overpricing, corruption and debt sustainability concerns,” Brad Parks, one of the authors of a major study by AidData on China’s signature program, said.
“In an average year, China’s international development finance commitments amount to about $85 billion. By comparison, the United States is spending about $37 billion in any given year to support global development activities,” he pointed out.
- Chinese loans have funded 13,427 infrastructure projects in the past 18 years, the report revealed.
- The majority of the risky high-interest funding is for Comrade Xi’s Belt and Road Initiative, rolled out in 2013.
- AidData’s study showed that developments worth $843 billion were signed off.
- The loans were made to 165 nations, the report stated.
Belt and Road signatories between 2013-2021
Delve deeper: Hidden debt and problematic projects have emerged in the study by AidData, a research lab at the elite College of William and Mary in the United States.
Big Picture: Up to half of China’s overseas lending is for the construction of roads, railways, power plants and dams. In turn, this has kept China’s sprawling industrial sectors humming.
Quick fix: “The developing world is helping fix China’s problems,” AidData’s executive director Parks said, referring to the country’s overcapacity crisis.
Environmental damage: Global public opinion has forced the ruling Communist Party of China to stop exporting dirty energy. President Xi told the United Nations General Assembly earlier this month that Beijing would “not build new coal-fired power projects abroad” as part of the BRI strategy.
Ecological risks: Apart from lumbering client states with unsustainable debt, the Belt and Road Initiative has also been branded an ecological disaster. “Many of BRI’s major corridors are known to pass through ecologically sensitive areas, [threatening] surrounding ecosystems,” the Environmental and Energy Study Institute reported back in 2018.
China Factor comment: Accusations of “debt diplomacy” have been leveled against Beijing and the Belt and Road Initiative for years. But now the true scale of the problem has been revealed along with the environmental damage caused by these polluted New Silk Roads.