Xi Jinping's Belt and Road loses momentum
Beijing's infrastructure investment under the "New Silk Roads" declines. Sub-Saharan Africa among the regions where there is the biggest reduction. U.S. and EU competition, Beijing's economic difficulties and fears over the debt situation of many partner countries weigh heavily.
Beijing (AsiaNews) - The Belt and Road Initiative is losing strength as Chinese investment in partner countries falls. In 2013, Xi Jinping launched the "New Silk Roads" project to make China the hub of world trade, thereby strengthening its geopolitical status vis-à-vis the US.
The Belt and Road is based on building infrastructure connecting the globe with China. From the pre-pandemic period to the present, however, the flow of Chinese funds has dropped dramatically, from .2 billion in 2019 to .7 billion last year, reports the China Global Investment Tracker.
Much affected is sub-Saharan Africa. According to the Green Finance and Development Center at Shanghai's Fudan University, infrastructure investment in the region dropped 55 percent to .5 billion between 2021 and 2022.
Reasons include competition from the U.S., European Union and G7 countries, which have stepped up commitments to Africa's development in the past year. In economic difficulty, Beijing has also decided to more carefully select its financial interventions in the "Global South," the area of the globe most affected by its diplomatic action.
It should also not be forgotten that the terms China offers for its loans and investments are often controversial. Beijing charges higher interest rates and requires the use of its own personnel and materials.
Finally, there is the question of the financial status of investment recipient countries. Maybank calculations say that 60 percent of Chinese overseas loans have gone to states with debt problems. Several economists note that this, coupled with fears of Beijing's growing influence, leads Southeast Asian countries, for example, to become more cautious toward the Belt and Road.