China's Belt and Road Initiative (BRI), a massive infrastructure development project launched in 2013, has generated over $2 trillion in contracts around the world, according to a white paper released by the Chinese government on Tuesday. The BRI, which is seen as a key pillar of President Xi Jinping's foreign policy, has invested in over 150 countries and international organizations, spanning six continents.
However, critics have long warned that the BRI is saddling developing countries with unsustainable debt burdens. The white paper acknowledged that countries participating in the BRI owe more than $300 billion to the Export-Import Bank of China (Eximbank), a key BRI creditor. However, experts say that this figure is likely understated, as it does not include hidden debts incurred by BRI projects.
One expert told that the actual debt owed by BRI countries could be as high as $800 billion. "We simply don't have information about these projects and how these figures have added up," she said.
Despite the concerns about debt, China is hailing the BRI as a success. The white paper said that the BRI has "delivered real gains to participating countries" by boosting trade and investment, creating jobs, and improving infrastructure. However, many of China's BRI partners are increasingly wary about the cost involved. Italy, the only one of the group of leading developed democracies to sign up to the investment scheme, said last month it was considering opting out of the deal.
China 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 has yet to confirm when the forum will take place.
The BRI is a complex and ambitious project with far-reaching implications. It is too early to say definitively whether it will be a success or a failure. However, the growing concerns about debt sustainability and the lack of transparency surrounding BRI projects are a cause for concern.
China needs to address these concerns if it wants to maintain the support of its BRI partners. It also needs to be more transparent about the costs and benefits of the BRI, both for China and for its partners.
