China’s vast Belt and Road Initiative is in danger of losing momentum. Because, opposition in targeted countries rises and debts mount paved the way for rival schemes. President Xi Jinping launched BRI in 2013, in order to harness China’s strengths in financing and infrastructure construction. This is for building a broad community of shared interests throughout Asia, Africa and Latin America.
Xi’s project of the century is now facing major challenges. It also faces backlashes abroad, according to a study by AidData, a research lab at the College of William and Mary in the United States. Brad Parks said that a growing number of policymakers in low- and middle-income countries are mothballing high profile BRI projects. This is due to overpricing, corruption and debt sustainability concerns. AidData said that $11.58 billion in projects in Malaysia have been cancelled, $1.5 billion cancelled in Kazakhstan and more than a $1 billion in Bolivia. China’s foreign ministry said that not all debts are unsustainable. Since its launch the BRI had consistently upheld principles of shared consultation, shared contributions and shared benefits, according to them.
He Lingxiao, from the China-led Asian Infrastructure Investment Bank, said that the overarching principles of BRI are sound. He added that how these principles will be translated into operational reality is where they advocate for high international standards. The AidData study looked at 13,427 China-backed projects in 165 countries over 18 years. This is worth $843 billion. Major changes in public sentiment makes it difficult for participating countries to maintain close relations with Beijing.
China-backed projects are increasingly suspended. Credit risks have also increased, with the exposure to Chinese debt. This is exceeding 10% of GDP in many low- and middle-income countries. 35% of Belt and Road projects were struggling with corruption, labour violations, environmental pollution and public protests, as per the survey. In June, the United States announced a rival G7 initiative known as Build Back Better World.
Financial support for developing nations can be provided for building infrastructure. Parks stated that B3W is going to increase choice in the infrastructure financing market. This could lead to some high-profile BRI defections. AidData’s study received funding from a diverse group of private and public organizations. This includes the Ford Foundation and the U.S. Agency for International Development. It said that, it is an independent research.