Pledge comes as Xi Jinping’s globe-spanning infrastructure blitz turns decade old
Workers at a construction site for the East Coast Rail Link, a Chinese-invested railway project in Malaysia. © Reuters
SHANGHAI — China on Tuesday said it will ramp up the Belt and Road Initiative (BRI) as it turns a decade old, snubbing criticism that the globe-spanning investment blitz is a debt trap for developing nations.
In a policy paper, the State Council said more than 150 countries and 30 international organizations had signed on to cooperation agreements by June this year, with hundreds of billions of dollars in loans, mostly for roads, ports and other infrastructure projects.
Proposed by President Xi Jinping in 2013 and inspired by the ancient Silk Road trade route, the BRI has served as China’s key foreign policy tool to exert influence in developing countries, including in Africa and across Asia.
“As a large and developing country that meets its responsibilities, China will continue to promote the BRI as its overarching plan and its top-level design for opening up and win-win international cooperation,” the paper said. “It will open up on a larger scale, across more areas and in greater depth.”
As China grapples with a slowdown in the world’s No. 2 economy, the international investment program has cushioned a hit to trade growth as ties sour with the U.S. and other major trading partners.
In 2022, China’s trade with BRI countries reached $2.9 trillion, accounting for 45% of its foreign shipments.
By forging trade and investment ties with BRI participants, China aims to secure supplies of resources, especially critical raw materials, and to open markets for its own companies, German think tank Merics said in a September report.
Chinese officials are now pushing the Digital Silk Road to promote e-commerce, mobile payments, smart cities, telemedicine, digital education and industrial digital transformation. The move reflects a shift from large-scale infrastructure projects to more technology-based cooperation in line with China’s own changing needs, Merics said.
Financing channels have expanded since the BRI was launched, the policy paper noted, with lending to fund projects advanced by the Beijing-based Asian Infrastructure Investment Bank (AIIB) and the government-established Silk Road Fund.
The balance of loans at Export-Import Bank of China reached 2.2 trillion yuan ($309 billion) in 2022. Meanwhile, about 152 billion in yuan-denominated bonds were issued overseas to finance BRI projects by the end of June.
The paper, which did not disclose total BRI loans outstanding, largely avoided addressing criticism that this lending has saddled scores of poor nations with unsustainable debt loads.
Some $76.8 billion worth of Chinese overseas loans were renegotiated or written off between 2020 and 2022, according to U.S. research firm Rhodium Group, compared to $17 billion in the preceding three years.
“To avoid causing debt risk and financial burden to the countries where BRI projects are located, China has prioritized economic and social benefits and provided loans for project construction based on local needs and conditions,” the paper said.
It also took a swipe at the U.S. and other developed economies for failing to contribute to common development that “delivers benefits to all,” despite them dominating the global economy.
“Certain countries overstretch the concept of national security and seek ‘decoupling’ in the name of ‘de-risking,'” the paper said, in an apparent reference to U.S. trade restrictions. “They trample international economic and trade order and market rules, and endanger the security and stability of international industrial supply chains.”