China’s Belt and Road Initiative (BRI) is undergoing a shift as leaders from developing countries gather in Beijing for a government-organized forum. The initiative, known as “One Belt, One Road,” has built power plants, roads, railroads, and ports worldwide and deepened China’s relations with Africa, Asia, Latin America, and the Middle East.
The initiative, a major part of President Xi Jinping’s push for China to play a larger role in global affairs, aims to grow trade and the economy by improving China’s connections with the rest of the world. Currently, 152 countries have signed a BRI agreement with China, with Italy, the only western European country to do so, expected to drop out when renewing in March next year.
Italy suffered a net loss as its trade deficit with China more than doubled since joining in 2019. China has become a major financer of development projects under BRI, on par with the World Bank, with more than 3,000 projects totaling nearly $1 trillion launched in BRI countries.
China has been criticized for its role in the Belt and Road Initiative (BRI), which has led to criticism for its environmental impact and the displacement of populations. Chinese development banks provided loans for these projects, but some governments have been unable to repay them, leading to allegations of “debt trap” diplomacy. Many economists argue that China did not intentionally make bad loans.
As a result, Chinese development loans have plummeted in recent years, as banks become more cautious about lending and recipient countries are less able to borrow due to their high levels of debt. Chinese loans have been a major contributor to the debt burdens in countries like Zambia and Pakistan.
Sri Lanka has reached an agreement with the Export-Import Bank of China on key terms and principles for restructuring its debt. Future BRI projects are expected to be smaller and greener, relying more on investment by Chinese companies than on development loans to governments.
China is expected to continue undertaking large projects, including high-visibility railways and oil and gas pipelines, with a revenue stream to pay back the investment. The launching of a Chinese high-speed railway in Indonesia has gained attention in both countries.
China has pledged to stop building coal power plants overseas and is encouraging projects related to the green transition, including wind and solar farms and factories for electric vehicle batteries. This has sparked environmental concerns in BRI-partner Hungary.