November 9, 2023
2 mins read

China Revamping Belt and Road Initiative

With more than half of its loans now in repayment, China is facing the fallout from the lack of guardrails in place at the outset of its Belt and Road Initiative….reports Asian Lite News

China is revamping the Belt and Road Initiative, which has pumped billions of dollars in grants and loans into developing countries over the last ten years. This comes as the country attempts to rein in the risks that plagued its earlier investments, according to a new report released on Monday, The Hill reported.

China has shifted its attention to reducing the risk of not being repaid, its exposure to environmental, social, or governance (ESG) factors, and potential damage to its reputation in the developing world, the report from AidData, a research lab at William & Mary, found.

The report said: “Beijing has launched a far-reaching effort to de-risk the (Belt and Road Initiative) by refocusing its time, money, and attention on distressed borrowers, troubled projects, and sources of public backlash in the Global South.”

“It is learning from its mistakes and becoming an increasingly adept international crisis manager,” it added.

With more than half of its loans now in repayment, China is facing the fallout from the lack of guardrails in place at the outset of its Belt and Road Initiative. About 19 per cent of borrowers had fallen behind on repayments as of 2021, up from seven per cent in 2000, according to the report, The Hill reported.

Beijing is thus shifting away from infrastructure project lending — once a central feature of its initiative — and moving towards emergency rescue lending to ensure its borrowers “have enough cash on hand to service their outstanding infrastructure project debts,” the report said.

The country has also sought to put in place more stringent ESG safeguards, with the risk prevalence rate in the country’s infrastructure project portfolio falling from 63 per cent in 2018 to 33 per cent in 2021, according to the report.

This shift comes as the US and its allies have ramped up their own lending to the developing world in recent years in an effort to compete with Beijing. In 2021, America committed USD 61 billion to low- and middle-income countries, narrowing the gap with China, as per The Hill.

Beijing has also pulled back slightly on its investments in developing countries. It committed USD 79 billion to low- and middle-income countries in 2021, down from an average of USD 117 billion a year between 2013 and 2017.

However, the report warned that Western nations don’t “seem to have a good understanding” of the recent changes China has made to its Belt and Road Initiative.

“Consequently, those who make and shape policy in Washington, London, Paris, Berlin, Tokyo, Rome, and Ottawa increasingly run the risk of competing with a version of the BRI that no longer exists,” the report noted, as per The Hill. (ANI)

ALSO READ: Taliban Say Pakistan Humiliated Kabul

Previous Story

Beijing Keen to Improve Ties with Washington: Chinese Official

Next Story

China’s mediatory role over Israel-Hamas conflict: Has it failed?

Latest from -Top News

India Eyes Global No. 3 Spot, Says Modi

The Prime Minister stated that people of India have resolved to make India a Developed Nation by 2047, when “we celebrate 100 years of Independence”….reports Asian Lite News Prime Minister Narendra Modi

Bangladesh’s Dark Side Unveiled in Geneva

Organised by diaspora activists, the exhibit exposed rising rights abuses in Bangladesh post-Hasina…reports Asian Lite News In a bid to spotlight the deteriorating human rights situation and rising persecution of minorities in

India Outpaces Peers in Morgan Stanley Outlook

Global investment firm reaffirms India’s status as top-performing economy in latest growth outlook…reports Asian Lite News India is set to retain its position as the fastest-growing economy among nations tracked by Morgan

Debt deals, austerity still rule Colombo

IMF approves $350 million t ranche as island nation sees early signs of recovery, but challenges persist amid ongoing reforms and rising public discontent….reports Asian Lite News The International Monetary Fund (IMF)
Go toTop

Don't Miss

Wang Yi fast-tracks Xi’s plan for control of Pacific islands

Pilots from some NATO member states have been reported to

China to Start Legislative Meetings Amid Concerns Over Economy, Security

The meetings, referred to as the “Two Sessions” or “lianghui”,