China’s Belt and Road scheme generates over US$2 trillion in contracts: Beijing
CHINA announced on Tuesday (Oct 10) that its Belt and Road Initiative (BRI) infrastructure project had generated US$2 trillion in contracts around the world, equivalent in size to some of the world’s biggest economies.
A White Paper from China’s State Council also said that countries participating in the initiative owe more than US$300 billion to the Export-Import Bank of China (Eximbank), a figure that one expert said was likely understated but which lays bare the huge debts incurred in the global infrastructure initiative.
China is hailing the 10th anniversary of the BRI this month, which has seen Beijing pour US$1 trillion into projects around the world in a defining geopolitical project for President Xi Jinping.
But critics have long accused China of luring lower-income countries into debt traps by offering huge, unaffordable loans.
Beijing said on Tuesday that the value of signed construction contracts with partners now totalled US$2 trillion – roughly the size of the economy of Russia or Canada. And “the actual turnover of Chinese contractors reached US$1.3 trillion”, it said.
It added that the balance of loans for BRI projects from Eximbank – a key BRI creditor – now totalled 2.2 trillion yuan (S$413.4 billion).
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That sum covers “130-plus participating countries and driving more than US$400 billion of investment and more than US$2 trillion of trade”, the White Paper said, suggesting an average of US$2.4 billion in debts per country.
The paper did not detail which countries owe the most, nor the kind of interest rates they are expected to pay.
One expert believes that the figure, while large, was likely “vastly underestimated”.
Niva Yau, a non-resident fellow with the Atlantic Council’s Global China Hub, said that there have been other academic research papers that say there could be hidden debts adding up to US$800 billion. “We simply don’t have information about these projects and how these figures have added up.”
‘Real gains’
Eximbank has financed major transport and energy projects that are part of the BRI and has been linked to foreign loan plans everywhere, from Africa to Central Asia.
Beijing’s Silk Road Fund – established to help fund BRI projects – in turn has “signed agreements on 75 projects with a committed investment of about US$22 billion”, the White Paper said.
China’s State Council hailed the BRI on Tuesday as having “delivered real gains to participating countries”.
However, many of its partners are increasingly wary about the cost involved.
Italy, the only one among the group of leading developed democracies to sign up to the investment scheme, said last month that it was considering opting out of the deal.
Beijing is due to host the third Belt and Road Forum for International Cooperation this month, with Russian President Vladimir Putin set to attend in his first visit to China since his invasion of Ukraine.
China is yet to confirm when the forum will take place.
“We welcome countries and partners actively participating in the Belt and Road Initiative to come to Beijing to discuss cooperation plans and seek common development,” foreign ministry spokesperson Mao Ning said last month. AFP
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