February 2023 \ World News \ INTERNATIONAL NEWS
China’s ‘New Silk Road’ stokes opposition

The Belt and Road Initiative is a massive China-led infrastructure project that aims to stretch around the globe.

By Sanjeev Sharma

“China has had a fair amount of success in redrawing trade maps around the world, in ways that put China at the centre and not the U.S. or Europe,” says CFR’s David Sacks, an expert on U.S.-China relations. The Belt and Road Initiative has also stoked opposition. For some countries that take on large amounts of debt to fund infrastructure upgrades, the BRI money is seen as a potential poisoned chalice, the article said.

Examples of such criticisms abound. In Malaysia, former Prime Minister Mahathir bin Mohamad campaigned against overpriced BRI initiatives and cancelled $22 billion worth of BRI projects, although he later announced his “full support” for the initiative. CFR’s Belt and Road Tracker shows overall debt to China has soared since 2013, surpassing 20 percent of GDP in some countries.

Since the COVID-19 pandemic and the Russian invasion of Ukraine roiled global markets, a climbing number of low-income BRI countries have struggled to repay loans associated with the initiative, spurring a wave of debt crises and new criticism for BRI.

In Pakistan, for example, imports required to build CPEC infrastructure contributed to a widening budget deficit, ultimately resulting in a bailout from the IMF. And in Ghana and Zambia, high debt loads that partly consisted of BRI loans led to sovereign default. However, many countries that sign on to BRI have few alternatives, Sacks says.

During the past decade, China handed out a trillion dollars in international loans as part of Beijing’s Belt and Road initiative, intended to develop economic trade and expand China’s influence across Asia, Africa and Latin America, Wall Street Journal reported.

Those loans made Beijing the largest government lender to the developing world by far, with its loans totalling nearly as much as those of all other governments combined, according to the World Bank.

Yet China’s lending practices have been criticised by foreign leaders, economists and others, who say the program has contributed to debt crises in places like Sri Lanka and Zambia, and that many countries have limited ways to repay the loans.

Tags: China