China’s Beijing — China declared on Tuesday that contracts worth two trillion dollars, or the amount of some of the largest economies in the world, have been generated by the infrastructure project known as the Belt and Road Initiative.
Countries taking part in the program owe the Export-Import Bank of China (Eximbank) more than $300 billion, according to a white paper from China’s State Council. One expert argued that this amount was probably underestimated but it still exposes the enormous debts incurred in the global infrastructure initiative.
This month, China is celebrating the tenth anniversary of the Belt and Road Initiative (BRI), a key geopolitical undertaking for President Xi Jinping that has seen Beijing invest a trillion dollars in projects worldwide.
However, detractors have long charged China with enticing nations with lesser incomes into debt traps through the provision of large, unaffordable loans.
Beijing announced on Tuesday that the signed building contracts with partners now have a total worth of two trillion dollars, which is about equivalent to the economies of Canada and Russia.
Furthermore, “the actual turnover of Chinese contractors reached $1.3 trillion” , according to the report.
Additionally, it stated that Eximbank, a significant BRI creditor, had outstanding debts for BRI projects totaling 2.2 trillion yuan ($307.4 billion).
According to the white paper, this sum represents “130-plus participating countries and driving more than $400 billion of investment and more than $2 trillion of trade,” implying an average of $2.4 billion in national debt.
The most indebted countries and the interest rates they should be paying were not specified in the document.
Despite being high, one expert told AFP that the sum was probably “vastly underestimated”.
“Other scholarly research papers have been written on these hidden debts that could total up to $800 billion,” stated Niva Yau, a non-resident fellow with the Global China Hub of the Atlantic Council.
“We simply don’t have information about these projects and how these figures have added up,” she stated.
“True profits”
Eximbank is associated with foreign lending schemes spanning from Africa to Central Asia and has funded significant energy and transportation projects throughout the Belt and Road Initiative.
As stated in the white paper, Beijing’s Silk Road Fund, which was founded to assist in funding Belt and Road Initiative projects, has “signed agreements on 75 projects with committed investment of about $22 billion”.
On Tuesday, the BRI was praised by China’s State Council as having “delivered real gains to participating countries”.
Many of its partners, though, are growing more cautious due to the associated costs.
The only major developed democracy to sign up for the investment scheme was Italy, which announced last month that it may decide to back out of the agreement.
Vladimir Putin, the president of Russia, is scheduled to attend the third Belt and Road Forum for International Cooperation in Beijing this month. This will be Putin’s first visit to China following his invasion of Ukraine.
China has not yet confirmed the date of the forum.
A spokesman for the foreign ministry, Mao Ning, stated last month that “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.”
