Joe Cash
Thu, October 19, 2023
Taliban's acting commerce minister Haji Nooruddin Azizi speaks during an interview with Reuters, at the Embassy of Afghanistan in Beijing
BEIJING (Reuters) - The Taliban administration wants to formally join Chinese President Xi Jinping's huge 'Belt and Road' infrastructure initiative and will send a technical team to China for talks, Afghanistan's acting commerce minister said on Thursday.
Beijing has sought to develop its ties with the Taliban-run government since it took over in 2021, even though no other foreign government has recognised the administration.
Last month, China became the first country to appoint an ambassador to Kabul, with other nations retaining previous ambassadors or appointed heads of mission in a charge d'affaires capacity that does not involve formally presenting credentials to the government.
"We requested China to allow us to be a part of the China-Pakistan Economic Corridor and Belt and Road Initiative... (and) are discussing technical issues today," acting Commerce Minister Haji Nooruddin Azizi told Reuters in an interview a day after the Belt and Road Forum ended in Beijing.
The Pakistan "economic corridor" refers to the huge flagship section of the Belt and Road Initiative (BRI) in Afghanistan's neighbour.
Azizi said the administration would also send a technical team to China to enable it to "better understand" the issues standing in the way of it joining the initiative, but did not elaborate on what was holding Afghanistan back.
Afghanistan could offer China a wealth of coveted mineral resources. Several Chinese companies already operate there, including the Metallurgical Corp. of China Ltd (MCC) which has held talks with the Taliban administration, as well as the previous Western-backed government, over plans for a potentially huge copper mine.
"China, which invests all over the world, should also invest in Afghanistan... we have everything they need, such as lithium, copper and iron," Azizi said. "Afghanistan is now, more than ever, ready for investment."
Asked about the MCC talks, Azizi said discussions had been delayed because the mine was near a historical site, but they were still ongoing. "The Chinese company has made a huge investment, and we support them," he added.
Investors have said security remains a concern. The Islamic State militant group has targeted foreign embassies and a hotel popular with Chinese investors in Kabul.
Asked about the security challenges, Azizi said security was a priority for the Taliban-run government, adding that after 20 years of war - which ended when foreign forces withdrew and the Taliban took over - meant more parts of the country were safe.
"It is now possible to travel to provinces where there is industry, agriculture and mines that one previously could not visit... security can be guaranteed," Azizi added.
Afghanistan and 34 other countries agreed to work together on the digital economy and green development on the sidelines of the Belt and Road Forum on Wednesday.
(Additional reporting by Ahmad Masih Noori and Charlotte Greenfield in Kabul; editing by Miral Fahmy)
China ready to boost Pakistan ties but urges security guarantee -Xi
Reuters
Thu, October 19, 2023
BEIJING (Reuters) - China is willing to strengthen co-operation and promote solidarity with Pakistan but has urged it to guarantee the safety of Chinese organisations and personnel working there, China's foreign ministry said, quoting President Xi Jinping.
China is a major ally and investor in Pakistan but both separatist and Islamist militants have attacked Chinese projects over recent years, killing Chinese personnel.
Xi on Thursday evening met Pakistan's caretaker prime minister, Anwar ul Haq Kakar, who is in Beijing this week for a forum on China's Belt and Road Initiative (BRI).
Xi said both countries should pursue an "upgraded version" of a China-Pakistan Economic Corridor, enhancing cooperation in industrial parks, agriculture and mining, new energy, as well as early implementation of major connectivity projects.
At the same time, he called for security for Chinese interests.
"We hope the Pakistani side will guarantee the safety of Chinese institutions and personnel in Pakistan," the ministry cited Xi as telling Kakar.
Kakar said on Wednesday Pakistan had completed more than 50 projects worth $25 billion under the CPEC, a flagship project under China's BRI with more than $65 billion pledged for road, rail and other infrastructure developments.
Xi said China was open to buttressing cooperation within the U.N. and Shanghai Cooperation Organisation framework and safeguard the interests of developing countries.China also welcomed more high-quality agricultural imports from Pakistan, the ministry said in a statement late on Thursday.
Separatist insurgents in Pakistan's resource-rich Balochistan province say China has ignored warnings not to enter deals with the Pakistani government. China has also warned of the danger or Islamist militants in Pakistan.
(Reporting by Liz Lee; editing by Robert Birsel)
China ramps up yuan internationalisation under Belt and Road Initiative
Reuters
Updated Thu, October 19, 2023 at 1:55 AM MDT·3 min read
31
SHANGHAI/SINGAPORE (Reuters) - China is using loans agreed through its Belt and Road Initiative (BRI) to promote the yuan internationally, having already boosted the yuan's share of global payments to record levels.
During the Belt and Road Forum in Beijing that ended on Wednesday, China's policy banks signed a series of yuan-denominated loan contracts with foreign lenders.
Many of the 130 countries that attended the forum belonged to the Global South, while most Western nations stayed away, and the presence of Russia's President Vladimir Putin lent support to Chinese President Xi Jinping's ambition for a new, multi-polar world order.
"You can see that the countries that are basically using the RMB for trade settlements are mostly countries that have visited Beijing or have come up with strategic agreements with Beijing, Russia being the most obvious one," said Alicia Garcia Herrero, Asia Pacific chief economist at Natixis.
Geostrategic tensions and high U.S. interest rates have helped Beijing increase the yuan's acceptability with some countries.
In September, the yuan - also called the RMB - accounted for 3.71% of global payments by value, hitting a record high, and almost doubling from 1.91% in January, according to SWIFT data released on Wednesday. Still, the yuan's share is negligible compared with the dollar's 46.6%.
Rising Sino-U.S. competition and the Russia-Ukraine war, both pushed Beijing to persuade more countries to use yuan for settlement, despite the currency's depreciation against the dollar.
And funding BRI projects has helped China revitalise the once-stalled process of yuan internationalisation. It is 10 years since Xi launched his signature BRI strategy, aimed at building global infrastructure and energy networks connecting Asia with Africa and Europe.
"Amid rising currency volatility globally, the BRI provides a good opportunity to expand the RMB's international clout," China International Capital Corp (CICC) wrote.
The China Development Bank, a state policy lender, signed yuan-denominated loan contracts with Malaysia's Maybank, Egypt's central bank, and BBVA Peru to support BRI projects.
Another policy bank, the Export-Import Bank of China, signed a yuan-based loan agreement with Saudi National Bank, while Bank of China helped Egypt issue Africa's first yuan-denominated Panda bonds.
Beijing also allocated an additional 80 billion yuan ($10.94 billion) to its Silk Road Fund for BRI projects.
A major driving force behind the rise in yuan financing has been the sharp increase in U.S. interest rates.
As a result of the "increasingly high borrowing cost of the dollar... many debtors have turned to the RMB for financing or refinancing," Natixis economist Haoxin Mu said, while also citing "the weaponisation of the dollar" in the wake of the Ukraine war as a factor behind the increased use of the yuan.
Natixis' Garcia Herrero said the yuan is still a long way from challenging the dollar's dominance, citing its tiny share in the oil trade, and foreigners slashing holdings in Chinese stocks and bonds. She also cautioned that a currency favoured by a bloc has less chance of being accepted as a reserve currency.
"A reserve currency is never a currency of a group of countries," Garcia Herrero said. "Can you do this in a targeted way with MOUs with all BRI countries? Maybe. But it will not become a truly global international currency."
($1 = 7.3157 Chinese yuan renminbi)
(Reporting by Samuel Shen and Tom Westbrook; Editing by Simon Cameron-Moore)
China’s Belt and Road Initiative: What’s working and what’s not
Ann Scott Tyson
Thu, October 19, 2023
Chinese leader Xi Jinping this week launched a new phase of China’s massive global infrastructure and development program, the Belt and Road Initiative (BRI), aimed at strengthening the country’s economic integration and influence with the rest of the world.
With an estimated $1 trillion in investments over the past 10 years, the initiative has focused heavily on big projects by Chinese state-owned firms to construct a network of railways, roads, ports, power grids, and pipelines across Asia, Europe, Africa, and Latin America. Going forward, the initiative will shift to smaller, greener, and digital projects by commercial firms, a pivot that Mr. Xi called “a new stage of higher-quality and higher-level development.”
Speaking on a vast stage at the Belt and Road Forum before dozens of world leaders assembled in Beijing’s Great Hall of the People on Wednesday, Mr. Xi called for building “a new platform for international economic cooperation” among the more than 150 nations that have signed BRI agreements with China.
“China can only do well when the world is doing well. When China does well, the world will get even better,” he said, adding that China is a main trading partner with more than 140 countries.
Mr. Xi first announced plans to build new intercontinental land and maritime linkages in 2013, describing them as the revival of ancient Silk Road trade routes. The initiative has won support from many countries since. It is especially popular in the Global South, where billions still lack basic infrastructure systems for drinking water, electricity, roads, schools, and internet. Now entering its second decade, the initiative also faces serious challenges, including rising debt among participating countries, China’s own groggy economy, and, recently, signs of regional competition. But after this week’s celebratory summit, analysts say the initiative is moving forward, as is China’s ability to shape the global development agenda.
The BRI was “very much based on China’s experience of infrastructure-led growth,” says Christoph Nedopil Wang, director of the Griffith Asia Institute and a professor at Griffith University in Australia. Basically, if you build a road, prosperity will follow.
“This is a strong view of the Belt and Road Initiative, to really copy China’s model internationally,” and to establish the initiative as a China-led alternative to Western development models, he says. Although China is adjusting that strategy in the initiative’s new phase, Dr. Nedopil Wang considers the first decade an overall success.
“The BRI has increased China’s credibility to deliver projects,” in part by branding much of China’s overseas economic engagement with the BRI label, he says.
Weighing the debt burden
The world will face a $15 trillion gap between projected and needed global infrastructure by 2040, according to the Global Infrastructure Hub.
“Together, with the contributions of the Belt and Road Initiative, we can turn the infrastructure emergency into an infrastructure opportunity” and “supercharge the implementation of the [United Nations] sustainable development goals,” U.N. Secretary-General António Guterres told the Beijing forum on Wednesday.
Indeed, many countries remain eager for China’s help in fast-tracking development.
As he waits to hear Mr. Xi’s speech, Nepal’s ambassador to China, Bishnu Pukar Shrestha, says his country wants Beijing to help build a railway between Shigatse, Tibet, and Kathmandu. “We need big projects; we need connectivity,” he says. “It’s not more than 100 kilometers [62 miles] on the Nepal side, so they can do this; they can grant us,” he says.
But initiative infrastructure projects have also relied on debt financing, adding to the debt burden of developing nations, as China has emerged as the world’s biggest bilateral creditor to low- and middle-income nations. Mr. Guterres stressed the need for “actions right now to promote effective debt relief mechanisms.”
Over the past 10 years, some of the countries that received large amounts of finance and investment from China under the initiative include Pakistan, Indonesia, Laos, Malaysia, Bangladesh, Saudi Arabia, and Nigeria.
In Pakistan, which has received some $52 billion in construction and investment, the China-Pakistan Economic Corridor (CPEC) has built several major highways covering about 500 miles and also prioritized hydropower and coal-fired power plants.
“When this initiative was launched, we were facing severe electricity shortages” and problems with connectivity, says Zafar Uddin Mahmood, the special envoy for CPEC in Beijing from 2014 to 2017. In three years, BRI projects produced nearly 8,000 megawatts of electricity, or 33% of the country’s total energy requirements, he says. “We were able to overcome the shortage of electricity in this short period of time,” says Mr. Mahmood, an assistant to Pakistan’s prime minister on the BRI from 2022 to 2023.
The large projects added significantly to Pakistan’s debt problem. “We are a heavily indebted country; we have more than $100 billion, and the Chinese are a major part of that, but ... not the entire part,” he says.
“When you compare [the debt burden] with the benefits, we don’t have any major issues,” he says. Chinese interest rates are on average below 3%, he says, and China has been “very generous in rescheduling the debts when we were unable to pay.”
Pakistan is not alone. In Laos, China built a $5.9 billion railway connecting the two countries that opened in December 2021, helping create jobs, fuel trade, and link the landlocked nation of 7 million people to global supply chains. The project is the first leg of China’s ambitious plan to expand its rail network through Laos, Thailand, and Malaysia to Singapore. But the project has also worsened Laos’ debt burden – in turn, creating problems for Beijing, experts say.
“If anything, BRI becomes a debt trap for China,” says Zongyuan Zoe Liu, a fellow at the Council on Foreign Relations and author of “Sovereign Funds: How the Communist Party of China Finances Its Global Ambitions.”
“It’s a problem when foreign sovereigns can no longer pay,” Dr. Liu adds. “It’s a lose-lose situation. ... China on one hand suffers from reputational damage, and delayed payment is the best-case scenario.”
China corrects course
China has begun joining with other foreign creditors to negotiate debt relief – such as for Zambia this summer – although Dr. Liu says Beijing prefers to extend the period of repayment rather than engage in debt forgiveness, the latter being known as a “haircut.”
Besides adding to debt issues, BRI projects have sparked criticism for having a lack of transparency, contributing to environmental problems, and employing Chinese goods and workers rather than local ones.
On Wednesday, Indonesian President Joko Widodo told the forum that initiative projects should stress giving countries “a sense of ownership,” rely on local employment and products, and “must not complicate their fiscal conditions.”
Italy, the only Western European country to have joined the BRI, has indicated it may not renew its participation when its five-year BRI memorandum of understanding with China expires in March next year.
“Trade-wise, it was a disaster for Italy. We didn’t get anything out of it,” says Alessia Amighini, co-head of the Asia Center and a senior associate research fellow at the Italian Institute for International Political Studies. Italy’s trade deficit with China grew from $20 billion in 2019 to $48 billion in 2022, she says.
“BRI is very effective for China’s connectivity with the rest of the world, but it’s not a win-win game,” says Dr. Amighini, an associate professor of economics at the University of Piemonte Orientale.
Beijing’s recalibration of the initiative is in part a response to such concerns, experts say.
In contrast with big infrastructure projects loaded with debt, the next phase will emphasize smaller-scale business investment with profit potential. Focus areas will include digital connectivity and the transition to renewable energy, an industry where China enjoys a competitive advantage.
China’s overall BRI investments and construction have declined since a peak in 2018, and the average deal size has fallen by nearly half. It has boosted green energy investment in areas such as solar, wind, and hydropower. Yet China also continues work on new coal-fired power plants overseas, despite a pledge not to do so, according to Dr. Nedopil Wang, the Griffith Asia Institute director.
“The original BRI relied very much on this debt financing and using Chinese infrastructure firms to build out public infrastructure,” says Dr. Nedopil Wang. China has realized that “roads don’t generate any revenue, particularly in developing countries,” he says, so it is moving toward “commercially viable projects.”
This week’s forum, which attracted about 10,000 officials, executives, and journalists, included a CEO conference in which some 300 Chinese and foreign business executives signed cooperation contracts worth $97 billion. Ben Okoye, executive vice chair of Brass Fertilizer & Petrochemical of Lagos, Nigeria, holds a freshly signed contract in a shiny red folder for a project connected to a new methanol plant.
“This is the first [BRI] contract for our company,” he says, but it plans to bid for more.
RFI
Wed, October 18, 2023
AP - Louise Delmotte
Beijing will inject over $100 billion of new funding into its Belt and Road initiative (BRI), China's President Xi Jinping said Wednesday at a summit marking the vast infrastructure project's tenth anniversary.
The Belt and Road strategy is a central pillar of Xi's bid to expand China's clout overseas, with Beijing saying it has now inked over two trillion dollars in contracts around the world.
Proponents hail it for bringing resources and economic growth to the Global South.
Unpaid loans
This week's summit celebrates the tenth anniversary of the project, which has been stalling due to the increasing incapability of receiving countries to pay back loans used for individual construction ventures.
Xi's initiative has built power plants, roads, railroads and ports around the world and deepened China’s ties with Africa, Asia, Latin America and the Mideast.
But the massive loans backing the projects have burdened poorer countries with heavy debts, in some cases leading to China taking control of those assets.
Chinese money
At the forum’s opening ceremony at the ornate and cavernous Great Hall of the People, Xi promised that two Chinese-backed development banks – the China Development Bank and the Export–Import Bank of China – will each set up 350 billion yuan (€45,3 billion) financing windows.
An additional 80 billion yuan (€10 billion) will be invested in Beijing's Silk Road Fund to support BRI projects.
China's BRI
XI launched the BRI in 2013 during a visit to Kazakhstan.
But Xi used the forum to meet with many of his allies, notably Russia's President Vladimir Putin.
(With newswires)
Read more on RFI English
Read also:
What is Europe's billion-euro plan to rival China's Belt & Road project?
G7 aims to raise $600 billion to counter China's Belt and Road
Europe counters China's Belt and Road strategy with plans for €150 billion investment in Africa
Putin and Xi get closer
Karina Tsui
Wed, October 18, 2023
China’s Xi Jinping and Russia’s Vladimir Putin declared that their relationship was “continuously deepening” after the two met in Beijing this week during the 10th anniversary celebrations of China’s Road and Belt Initiative.
As a worsening conflict brews in the Middle East, the two leaders hailed their “close and effective strategic coordination” amid their increasing isolation from the West.
The Xi-Putin meeting comes as the U.S. tightened restrictions on Beijing’s access to artificial intelligence chips as part of a series of measures announced Tuesday that would prevent China from making “breakthroughs” to advance its military operations, Commerce Department Secretary Gina Raimondo said. A 2022 Georgetown University report found that of 97 AI chips procured through the Chinese military over an eight-month period in 2020, nearly all were designed by U.S. companies.
There are cracks in the Sino-Russian relationship: Putin’s Ukraine invasion has weakened China’s geopolitical goal of weakening the Western alliance, while Russia is likely miffed by Xi’s decision not to offer them lethal aid. But China is motivated “to keep Russia in the game as long as possible,” writes Bloomberg Opinion columnist Minxin Pei. The weaker Russia becomes, the more Beijing is incentivized to “prop it up” given that Xi does not want to face the US and its allies alone, Pei writes. Beijing has provided Moscow with equipment and materials crucial for military uses, and bilateral trade between the two countries reached a record high in 2022.
Both Beijing and Moscow have avoided directly condemning Hamas for its attack on Israel, and have instead focused their criticism on Israeli attacks in Gaza and called for an independent Palestinian state. China, in particular, has attempted to assert itself in the Middle East by forging stronger diplomatic ties with Arab leaders, but a previous attempt by Beijing to mediate tensions between Israelis and Palestinians yielded few results. Foreign policy experts note that for Russia and China, the fighting between Israel and Hamas is a “long-awaited distraction” from the Ukraine war and China’s ongoing crackdown on Uyghurs in Xinjiang.
Thu, October 19, 2023
Chinese leader Xi Jinping this week launched a new phase of China’s massive global infrastructure and development program, the Belt and Road Initiative (BRI), aimed at strengthening the country’s economic integration and influence with the rest of the world.
With an estimated $1 trillion in investments over the past 10 years, the initiative has focused heavily on big projects by Chinese state-owned firms to construct a network of railways, roads, ports, power grids, and pipelines across Asia, Europe, Africa, and Latin America. Going forward, the initiative will shift to smaller, greener, and digital projects by commercial firms, a pivot that Mr. Xi called “a new stage of higher-quality and higher-level development.”
Speaking on a vast stage at the Belt and Road Forum before dozens of world leaders assembled in Beijing’s Great Hall of the People on Wednesday, Mr. Xi called for building “a new platform for international economic cooperation” among the more than 150 nations that have signed BRI agreements with China.
“China can only do well when the world is doing well. When China does well, the world will get even better,” he said, adding that China is a main trading partner with more than 140 countries.
Mr. Xi first announced plans to build new intercontinental land and maritime linkages in 2013, describing them as the revival of ancient Silk Road trade routes. The initiative has won support from many countries since. It is especially popular in the Global South, where billions still lack basic infrastructure systems for drinking water, electricity, roads, schools, and internet. Now entering its second decade, the initiative also faces serious challenges, including rising debt among participating countries, China’s own groggy economy, and, recently, signs of regional competition. But after this week’s celebratory summit, analysts say the initiative is moving forward, as is China’s ability to shape the global development agenda.
The BRI was “very much based on China’s experience of infrastructure-led growth,” says Christoph Nedopil Wang, director of the Griffith Asia Institute and a professor at Griffith University in Australia. Basically, if you build a road, prosperity will follow.
“This is a strong view of the Belt and Road Initiative, to really copy China’s model internationally,” and to establish the initiative as a China-led alternative to Western development models, he says. Although China is adjusting that strategy in the initiative’s new phase, Dr. Nedopil Wang considers the first decade an overall success.
“The BRI has increased China’s credibility to deliver projects,” in part by branding much of China’s overseas economic engagement with the BRI label, he says.
Weighing the debt burden
The world will face a $15 trillion gap between projected and needed global infrastructure by 2040, according to the Global Infrastructure Hub.
“Together, with the contributions of the Belt and Road Initiative, we can turn the infrastructure emergency into an infrastructure opportunity” and “supercharge the implementation of the [United Nations] sustainable development goals,” U.N. Secretary-General António Guterres told the Beijing forum on Wednesday.
Indeed, many countries remain eager for China’s help in fast-tracking development.
As he waits to hear Mr. Xi’s speech, Nepal’s ambassador to China, Bishnu Pukar Shrestha, says his country wants Beijing to help build a railway between Shigatse, Tibet, and Kathmandu. “We need big projects; we need connectivity,” he says. “It’s not more than 100 kilometers [62 miles] on the Nepal side, so they can do this; they can grant us,” he says.
But initiative infrastructure projects have also relied on debt financing, adding to the debt burden of developing nations, as China has emerged as the world’s biggest bilateral creditor to low- and middle-income nations. Mr. Guterres stressed the need for “actions right now to promote effective debt relief mechanisms.”
Over the past 10 years, some of the countries that received large amounts of finance and investment from China under the initiative include Pakistan, Indonesia, Laos, Malaysia, Bangladesh, Saudi Arabia, and Nigeria.
In Pakistan, which has received some $52 billion in construction and investment, the China-Pakistan Economic Corridor (CPEC) has built several major highways covering about 500 miles and also prioritized hydropower and coal-fired power plants.
“When this initiative was launched, we were facing severe electricity shortages” and problems with connectivity, says Zafar Uddin Mahmood, the special envoy for CPEC in Beijing from 2014 to 2017. In three years, BRI projects produced nearly 8,000 megawatts of electricity, or 33% of the country’s total energy requirements, he says. “We were able to overcome the shortage of electricity in this short period of time,” says Mr. Mahmood, an assistant to Pakistan’s prime minister on the BRI from 2022 to 2023.
The large projects added significantly to Pakistan’s debt problem. “We are a heavily indebted country; we have more than $100 billion, and the Chinese are a major part of that, but ... not the entire part,” he says.
“When you compare [the debt burden] with the benefits, we don’t have any major issues,” he says. Chinese interest rates are on average below 3%, he says, and China has been “very generous in rescheduling the debts when we were unable to pay.”
Pakistan is not alone. In Laos, China built a $5.9 billion railway connecting the two countries that opened in December 2021, helping create jobs, fuel trade, and link the landlocked nation of 7 million people to global supply chains. The project is the first leg of China’s ambitious plan to expand its rail network through Laos, Thailand, and Malaysia to Singapore. But the project has also worsened Laos’ debt burden – in turn, creating problems for Beijing, experts say.
“If anything, BRI becomes a debt trap for China,” says Zongyuan Zoe Liu, a fellow at the Council on Foreign Relations and author of “Sovereign Funds: How the Communist Party of China Finances Its Global Ambitions.”
“It’s a problem when foreign sovereigns can no longer pay,” Dr. Liu adds. “It’s a lose-lose situation. ... China on one hand suffers from reputational damage, and delayed payment is the best-case scenario.”
China corrects course
China has begun joining with other foreign creditors to negotiate debt relief – such as for Zambia this summer – although Dr. Liu says Beijing prefers to extend the period of repayment rather than engage in debt forgiveness, the latter being known as a “haircut.”
Besides adding to debt issues, BRI projects have sparked criticism for having a lack of transparency, contributing to environmental problems, and employing Chinese goods and workers rather than local ones.
On Wednesday, Indonesian President Joko Widodo told the forum that initiative projects should stress giving countries “a sense of ownership,” rely on local employment and products, and “must not complicate their fiscal conditions.”
Italy, the only Western European country to have joined the BRI, has indicated it may not renew its participation when its five-year BRI memorandum of understanding with China expires in March next year.
“Trade-wise, it was a disaster for Italy. We didn’t get anything out of it,” says Alessia Amighini, co-head of the Asia Center and a senior associate research fellow at the Italian Institute for International Political Studies. Italy’s trade deficit with China grew from $20 billion in 2019 to $48 billion in 2022, she says.
“BRI is very effective for China’s connectivity with the rest of the world, but it’s not a win-win game,” says Dr. Amighini, an associate professor of economics at the University of Piemonte Orientale.
Beijing’s recalibration of the initiative is in part a response to such concerns, experts say.
In contrast with big infrastructure projects loaded with debt, the next phase will emphasize smaller-scale business investment with profit potential. Focus areas will include digital connectivity and the transition to renewable energy, an industry where China enjoys a competitive advantage.
China’s overall BRI investments and construction have declined since a peak in 2018, and the average deal size has fallen by nearly half. It has boosted green energy investment in areas such as solar, wind, and hydropower. Yet China also continues work on new coal-fired power plants overseas, despite a pledge not to do so, according to Dr. Nedopil Wang, the Griffith Asia Institute director.
“The original BRI relied very much on this debt financing and using Chinese infrastructure firms to build out public infrastructure,” says Dr. Nedopil Wang. China has realized that “roads don’t generate any revenue, particularly in developing countries,” he says, so it is moving toward “commercially viable projects.”
This week’s forum, which attracted about 10,000 officials, executives, and journalists, included a CEO conference in which some 300 Chinese and foreign business executives signed cooperation contracts worth $97 billion. Ben Okoye, executive vice chair of Brass Fertilizer & Petrochemical of Lagos, Nigeria, holds a freshly signed contract in a shiny red folder for a project connected to a new methanol plant.
“This is the first [BRI] contract for our company,” he says, but it plans to bid for more.
China marks ten years of Belt & Road forum, though interest is waning
RFI
Wed, October 18, 2023
AP - Louise Delmotte
Beijing will inject over $100 billion of new funding into its Belt and Road initiative (BRI), China's President Xi Jinping said Wednesday at a summit marking the vast infrastructure project's tenth anniversary.
The Belt and Road strategy is a central pillar of Xi's bid to expand China's clout overseas, with Beijing saying it has now inked over two trillion dollars in contracts around the world.
Proponents hail it for bringing resources and economic growth to the Global South.
Unpaid loans
This week's summit celebrates the tenth anniversary of the project, which has been stalling due to the increasing incapability of receiving countries to pay back loans used for individual construction ventures.
Xi's initiative has built power plants, roads, railroads and ports around the world and deepened China’s ties with Africa, Asia, Latin America and the Mideast.
But the massive loans backing the projects have burdened poorer countries with heavy debts, in some cases leading to China taking control of those assets.
Chinese money
At the forum’s opening ceremony at the ornate and cavernous Great Hall of the People, Xi promised that two Chinese-backed development banks – the China Development Bank and the Export–Import Bank of China – will each set up 350 billion yuan (€45,3 billion) financing windows.
An additional 80 billion yuan (€10 billion) will be invested in Beijing's Silk Road Fund to support BRI projects.
China's BRI
XI launched the BRI in 2013 during a visit to Kazakhstan.
But Xi used the forum to meet with many of his allies, notably Russia's President Vladimir Putin.
(With newswires)
Read more on RFI English
Read also:
What is Europe's billion-euro plan to rival China's Belt & Road project?
G7 aims to raise $600 billion to counter China's Belt and Road
Europe counters China's Belt and Road strategy with plans for €150 billion investment in Africa
Putin and Xi get closer
Karina Tsui
Wed, October 18, 2023
China’s Xi Jinping and Russia’s Vladimir Putin declared that their relationship was “continuously deepening” after the two met in Beijing this week during the 10th anniversary celebrations of China’s Road and Belt Initiative.
As a worsening conflict brews in the Middle East, the two leaders hailed their “close and effective strategic coordination” amid their increasing isolation from the West.
The Xi-Putin meeting comes as the U.S. tightened restrictions on Beijing’s access to artificial intelligence chips as part of a series of measures announced Tuesday that would prevent China from making “breakthroughs” to advance its military operations, Commerce Department Secretary Gina Raimondo said. A 2022 Georgetown University report found that of 97 AI chips procured through the Chinese military over an eight-month period in 2020, nearly all were designed by U.S. companies.
There are cracks in the Sino-Russian relationship: Putin’s Ukraine invasion has weakened China’s geopolitical goal of weakening the Western alliance, while Russia is likely miffed by Xi’s decision not to offer them lethal aid. But China is motivated “to keep Russia in the game as long as possible,” writes Bloomberg Opinion columnist Minxin Pei. The weaker Russia becomes, the more Beijing is incentivized to “prop it up” given that Xi does not want to face the US and its allies alone, Pei writes. Beijing has provided Moscow with equipment and materials crucial for military uses, and bilateral trade between the two countries reached a record high in 2022.
Both Beijing and Moscow have avoided directly condemning Hamas for its attack on Israel, and have instead focused their criticism on Israeli attacks in Gaza and called for an independent Palestinian state. China, in particular, has attempted to assert itself in the Middle East by forging stronger diplomatic ties with Arab leaders, but a previous attempt by Beijing to mediate tensions between Israelis and Palestinians yielded few results. Foreign policy experts note that for Russia and China, the fighting between Israel and Hamas is a “long-awaited distraction” from the Ukraine war and China’s ongoing crackdown on Uyghurs in Xinjiang.
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