It is time to prioritize responsible sovereign lending and hold Beijing accountable for its exploitative Belt and Road Initiative.
By: Leslie Fu & Jianli Yang
Aug 27, 2023
This year marks the tenth anniversary of China’s ambitious global infrastructure-financing project, the Belt and Road Initiative (BRI), a signature project of Xi Jinping. This fall, Beijing will host the Belt and Road International Cooperation Summit Forum, although several major European countries are planning not to attend. Despite China’s significant efforts, the BRI has had limited success in developed democratic countries, excluding Italy. By the end of this year, Italy is likely to withdraw from the BRI agreement it signed with China in 2019. However, China’s BRI continues to make progress in other parts of the world.
For example, despite indications that war-torn Afghanistan has limited capacity to repay its financial obligations, China in May 2023 extended a BRI investment to the Taliban-controlled country, which is challenged by a fragile governance structure and weakened security apparatus. This is part of a larger trend whereby China ensnares low- and middle-income countries in a web of debt. Unfortunately, China’s irresponsible lending behavior goes unpunished, owing to the lack of formal international laws governing sovereign lending, coupled with the fact that China has no incentives to adhere to nonbinding norms… [Continue Reading]