China’s vast Belt and Road Initiative (BRI) is at risk of losing momentum as opposition in targeted countries rises and debts mount, paving the way for rival schemes to squeeze Beijing out, a new study showed on Wednesday (Sept 29).
President Xi Jinping launched the BRI in 2013 to use China’s strengths in financing and infrastructure construction to “build a broad community of shared interests” throughout Asia, Africa and Latin America.
But Mr Xi’s “project of the century” is now facing major challenges and significant backlashes abroad, according to a study by AidData, a research lab at the College of William and Mary within the united states.
“A growing number of policymakers in low- and middle-income countries are mothballing high-profile BRI projects due to overpricing, corruption and debt sustainability concerns,” said Dr Brad Parks, one among the study’s authors.
AidData said US$11.58 billion (S$15.7 billion) in projects in Malaysia are cancelled over 2013-2021, with nearly US$1.5 billion cancelled in Kazakhstan and over US$1 billion in Bolivia.
China’s foreign ministry didn’t immediately respond to a request for comment on Wednesday.
Mr He Lingxiao, the spokesman for the China-led Asian Infrastructure Investment Bank, which is closely linked to the BRI, said: “We believe the overarching principles of BRI are sound.
“How these principles are going to be translated into operational reality is where we advocate for high international standards,” he said.
The AidData study looked at 13,427 Chinese-backed projects in 165 countries over 18 years, worth US$843 billion in total, and noted that Beijing’s annual international development finance commitments are now double those of the US.
But major changes in public sentiment made it difficult for participating countries to maintain close relations with Beijing, Dr Parks said.
The study said an increasing number of China-backed projects are suspended or cancelled since BRI’s 2013 launch, with evidence of “buyer’s remorse” in countries as far afield as Kazakhstan, Costa Rica and Cameroon.
Credit risks have also increased, with the exposure to Chinese debt now exceeding 10 per cent of GDP in many low- and middle-income countries.
The survey found that 35 per cent of BRI projects were struggling with corruption, labour violations, environmental pollution and public protests.
In June this year, the US announced a rival Group of Seven initiative referred to as Build Back Better World (B3W) to provide financial support for developing nations to make infrastructure.
“B3W goes to extend choice within the infrastructure financing market, which could lead on to some high-profile BRI defections,” Dr Parks said.
AidData’s study received funding from a diverse group of private and public organisations, including the Ford Foundation and also the US Agency for International Development (USAID).
It said its research is independent and transparent and not guided or determined by its funders.