President Xi Jinping called for another “golden decade” at the 10th anniversary of his signature foreign policy project the Belt and Road Initiative.
In Beijing’s Great Hall of the People last month, he told “representatives from over 140 countries” about a “robust and fruitful” first 10 years.
“We must embark with drive and enthusiasm on the new journey toward another golden decade,” Xi said in his opening address.
Fast forward just a few weeks and the true cost of China’s New Silk Roads, entwined with multi-billion-dollar infrastructure projects and digital links, is just starting to surface.
On Monday, American research lab AidData released a 400-page report, revealing that Chinese financial institutions had lent US$1.34 trillion to developing countries from 2000 to 2021.
The time frame included the 12 years before the Belt and Road Initiative was launched. Still, it painted a picture layered in debt.
“Beijing is navigating an unfamiliar role – as the world’s largest official debt collector. Total outstanding debt from borrowers in the developing world to China is at least $1.1 trillion,” AidData stated as reported by the AFP news agency on Tuesday.
Behind the numbers:
- The study included a “dataset” of more than 20,000 projects.
- They spanned 165 low- and middle-income countries.
- Loans and grants from China totaled more than $1.3 trillion.
Delve deeper: “Beijing is not going to stand by and watch its flagship global infrastructure initiative crash and burn,” AidDate’s Executive Director Brad Parks, a co-author of the report, said.
Between the lines: “It is finding its footing as an international crisis manager and refocusing its time and money on troubled projects, distressed borrowers, and sources of public backlash in the Global South,” he added.
Big picture: Last week, US President Joe Biden offered an alternative to the Belt and Road project at the Americas Partnership for Economic Prosperity Leaders’ Summit.
What happened: He pledged billions of dollars to build up infrastructure throughout the Western Hemisphere with a focus on Latin America.
Why it matters: “I want to make sure that our closest neighbors know they have a real choice between debt-trap diplomacy and high-quality transparent approaches to infrastructure and to development,” Biden said as reported by the Associated Press.
China Factor comment: With China’s economy creaking under a mountain of debt, the United States and its democratic allies can take a new road paved with opportunities.