BEIJING – China announced Tuesday its Belt and Road Initiative infrastructure project had generated two trillion dollars in contracts around the world, equivalent in size to some of the world’s biggest economies.
A white paper from China’s State Council also said countries participating in the initiative owe more than $300 billion to the Export-Import Bank of China (Eximbank), a figure one expert said was likely understated but which lays bare the huge debts incurred in the global infrastructure initiative.
China is hailing this month the 10th anniversary of its Belt and Road Initiative (BRI), which has seen Beijing pour a trillion dollars into projects around the world in a defining geopolitical project for President Xi Jinping. But critics have long accused China of luring lower-income countries into debt traps by offering huge, unaffordable loans.
Beijing said Tuesday the value of signed construction contracts with partners now totalled two trillion dollars — roughly the size of the economy of Russia or Canada. And “the actual turnover of Chinese contractors reached $1.3 trillion”, it said. It also said the balance of loans for BRI projects from Eximbank — a key BRI creditor — now totalled 2.2 trillion yuan ($307.4 billion). That total covers “130-plus participating countries and driving more than $400 billion of investment and more than $2 trillion of trade”, the white paper said, suggesting an average of $2.4 billion in debts per country.
The paper did not detail which countries owe the most, nor the kind of interest rates they are expected to pay. One expert told AFP the figure, while large, was likely “vastly underestimated”. “There have been other academic research papers that have written on these hidden debts that could add up to $800 billion,” Niva Yau, a non-resident fellow with the Atlantic Council’s Global China Hub, said. “We simply don’t have information about these projects and how these figures have added up,” she said. – ‘Real gains’ – Eximbank has financed major transport and energy projects across the BRI and has been linked to foreign loan plans everywhere from Africa to Central Asia.
Beijing’s Silk Road Fund — established to help fund BRI projects — in turn has “signed agreements on 75 projects with committed investment of about $22 billion”, the white paper said. China’s State Council hailed the BRI on Tuesday as having “delivered real gains to participating countries”. However, many of its 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.
Beijing 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 is yet to confirm when the forum will take place. “We welcome countries and partners actively participating in the Belt and Road Initiative to come to Beijing to discuss cooperation plans and seek common development,” foreign ministry spokesperson Mao Ning said last month