Since 2013, a key part of Beijing’s foreign policy has been the Belt and Road Initiative (BRI), a massive network of ports, railways, and other infrastructure projects to connect China to Central Asia, Europe, the Middle East, and even parts of Africa. James Snell examines the ways in which it leaves countries indebted to China, paying particular attention to its impact on the Middle East:
The fuel for this project is Chinese cash, and more accurately Chinese-held debt. Between 2013 and 2018—and significantly increasing since—the South China Morning Post reported that around $300 billion of BRI cash was disbursed for work in over 50 countries, hundreds of billions of which was publicly and privately guaranteed debt to Chinese companies and state banks.
In September, it was reported that the “hidden debts” accumulated by BRI countries were over $385 billion. More than 40 poor countries were exposed to as much Chinese debt as 10 percent of their total GDP. . . . The conditions attached to Chinese loans have been variously described as “crippling” and “draconian.”
From Kashgar in Xinjiang province to the Balkans, the model is the same. Infrastructure projects are drawn up, sometimes necessary ones, sometimes projects designed for government prestige rather than local utility. Loans are made by state-backed Chinese banks, to pay part or the whole of the cost, which is often inflated. The firms tasked with the building are Chinese. They import Chinese managers and Chinese workers. Once the project is done, the local government is left with the bill—unless they default, in which case Beijing is able to take possession.
The Chinese control of vital infrastructure in countries like Britain and Greece, and even abandoned projects like in the United Arab Emirates, show that China can also easily buy and sell its way to the ownership of key industries.
Read more on The New Arab: https://english.alaraby.co.uk/analysis/chinas-empire-debt-belt-and-road-initiative