yhuang9_ValerySharifulinTASSviaGettyImages_jinpingkhanshakehands

Economics

¿Puede la Iniciativa del Cinturón y Ruta de la Seda convertirse en una trampa para China?

May 22, 2019 Yasheng Huang

CAMBRIDGE – Los críticos a menudo afirman que China está utilizando su masiva “Iniciativa del Cinturón y Ruta de la Seda” (BRI) como una forma de “diplomacia coercitiva de la trampa de la deuda”, con el propósito de ejercer control sobre los países que se unen a su esquema de inversión transnacional en infraestructura. Tal como señaló recientemente Deborah Brautigam de la Universidad John Hopkins, los medios de comunicación a menudo exageran este riesgo. De hecho, la Iniciativa BRI puede tener inmerso un tipo de riesgo distinto: un riesgo para la propia China.

En la reciente cumbre sobre la Iniciativa BRI en Pekín, el presidente chino Xi Jinping aparentemente reconoció las críticas relativas a la “trampa de la deuda”. En su discurso, Xi dijo que “construir infraestructura de alta calidad, sostenible, resistente a riesgos, que se erija a un precio razonable, y sea inclusiva ayudará a que los países utilicen plenamente sus dotaciones de recursos naturales”.

Esta es una señal alentadora, ya que muestra que China ha tomado mayor conciencia sobre las implicaciones de la deuda vinculada a la Iniciativa BRI. Un estudio realizado por el Center for Global Development llegó a la conclusión de que ocho de los 63 países que participan en la Iniciativa BRI están en riesgo de sufrir “dificultades en materia de deuda”.

To continue reading, register now.

Subscribe now for unlimited access to everything PS has to offer.

As a registered user, you can enjoy more PS content every month – for free.

Already have an account? Log in

Subscribe to PS Digital

Access every new PS commentary, our entire On Point suite of subscriber-exclusive content – including Longer Reads, Insider Interviews, Big Picture/Big Question, and Say More – and the full PS archive.

Subscribe Now

new comment has been posted. new comments have been posted.

0 Comments on this paragraph, 10 Comments on this article

joel bernard May 29, 2019

Whether or not BRI infrastructure investments benefit the indebted "host" country, I think they generally must benefit China.

The construction loans are made by state-controlled banks to largely state-owned Chinese companies; the workers and materials are mostly imported from China. It's a form of stimulus for the Chinese economy, in principle paid for by the host country.

Whether or not the projects are completed (or even useful) and the loans repaid, a loan default by the host is still a stimulus for China. And, as happened in Sri Lanka, in the event of a default, there's the possibility of acquiring a long-term lease on strategic territory.
A new reply to this comment has been posted.
Yoshimichi Moriyama May 28, 2019

"Well-established Chinese soft power in Pakistan is another reason that contributes to the smuggling of Pakistani women to China...Pakistan is not the only country where Chinese are involved in "bride smuggling"...(Irfan Yar, Why and How Pakistani Christian Girls Are Smuggled to China, thediplomat.com, May 24.)"

https://thediplomat.com/2019/05/why-and-how-pakistani-christian-girls-are-smuggled-to-china/
A new reply to this comment has been posted.
j. von Hettlingen May 25, 2019

Yasheng Huang says China’s Belt-and-Road Initiative (BRI) is a boon to some tin-pot dictators, who rule some of the world’s “most authoritarian, financially opaque, and economically backward” countries. With China’s help, despots and crooks are using its infrastructure project to stay in power. Many of the recipient countries rank high on the list of the world’s most corrupt countries, while scoring low on literacy rates.
Although China dismisses the claim that it uses BRI as a “geopolitical pool” and portrays it as a “platform for cooperation”, critics see it is as a form of “debt-trap diplomacy.” It enables Beijing to cement its influence, and financially bind countries to China, which exerts control over them, if they fail to repay the loans for investing in their infrastructure. Yet others say the project could also “hold a different kind of risk – for China itself.”
In 2013 President Xi Jinping outlined his $900 billion project – the recreation of the old Silk Road trading routes between Asia and the rest of the world, which aimed to herald the most ambitious infrastructure investment plan in history. The BRI was hailed as a coherent plan of quasi-coercive economic statecraft that would ensnare all its participants into the Chinese sphere of influence – an extension of China’s rising power, that came to unsettle the world.
Xi sees it as a personal victory and a prestige for China, that his BRI attracts much interest and attention across the globe. Critics say the recipient countries allow Xi to then tell his Chinese citizens that the entire world is endorsing his policies and that he is the one to have put China firmly back at the centre of the global stage.
Five years after BRI was first unveiled, questions still remain whether foreign participants can actually benefit from it. Infrastructure projects like those under the BRI are a classic example of an “obsolescing bargain model.” It says a foreign investor tends to lose its bargaining power, which will shift to the government of the host country, the more it invests there. Besides it involves bulky objects, “bolted to the ground, and have zero economic value if left incomplete.”
The author says, China has been economically weakened by the ongoing trade war with the US, its inability to ditch its state-capitalist economy and protectionism. Facing criticism, Beijing had renegotiated or written off debts incurred by recipient countries of BRI loans, sometimes in exchange for geostrategic sites. Sri Lanka finally agreed to turn over the port of Hambantota to China for 99 years following the cancellation of its debt.
Apart from hidden costs that will come back to haunt Beijing, critics have also called for China to institutionalise BRI, so that the project is not seen as entirely Chinese-led. But state-owned companies lead most of the existing investments in the projects. This clientelistic relationship between the government and SOEs makes it harder for these firms to resist government requests to change their trade and investment patterns in support of official goals.
Others have cited environmental concerns, as Chinese companies build coal and hydro power projects across the world, posing a risk to biodiversity, and causing floods and landslides. A study titled ‘Greening the Belt and Road Initiative’ released by the World Wildlife Fund (WWF) and HSBC in January found that getting the BRI to “go green” has not gained the proper attention in the absence of information on sustainable and green investment opportunities.
The author says “rather than exposing itself to massive political, economic, and default risks, Chinese policymakers should instead seek to repair relations with the West.” Not least thanks to its WTO membership had China’s economy been able to benefit from globalisation and access to Western technology and knowhow.
Beijing should know by now that engaging with the West brings much less risk that its BRI does, which could “entail risks and uncertainties that could become problematic for the Chinese economy.” It is time for Beijing to rethink the “pace, scope and scale” of its BRI, as its economy is slowing down, with little light on the horizon for its export due to geopolitical factors.
A new reply to this comment has been posted.
Paul Friesen May 24, 2019

I am a good bit more hopeful that the "belt and road" initiative will succeed. Incomes in China are rising. It is in the process of changing from being the world's biggest producer of manufactured consumer goods to being the world's biggest consumer of such goods. The world will be needing new countries to supply cheap labour. Infrastructure connecting poor countries to China seems an ideal way to get industrialization started in these countries. And industrialization is what is needed for the loans to be re-paid.

Past "western" aid that resulted in debt traps took place in a very different context. No thought was given to the need for industrialization. "Small is beautiful" projects did little or nothing to advance industrialization, and many countries just had no activities that could generate the required revenue.
A new reply to this comment has been posted.
Yoshimichi Moriyama May 24, 2019

A Chinese expert said to a Japanese on condition of anonymity in 2014, "No one will be talking about the Belt and Road Initiative ten years later." Another said, "The massive loans China is giving will be turned into non-performing ones."
- Yoshimichi Moriyama May 24, 2019
  
  PS
  There has never been a world-wide Pax-Americana at any time in the postwar world; there were if any only two local or regional Pax-Americanas, one covering Western Europe and one covering Japan. They were not the product of unilateral imposition of an American will on reluctant countries. Western Europe and Japan were too devastated by war to rise on their own economically and for their security; they could not assume their own responsibility; they desired the US to take it for them; Washington did it.
  If China wants to have a place of honor in the world and be respected again as it once was, it will need to do what will please other peoples.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
B Wilds May 23, 2019

More of the same wild spending! China is hellbent on pursuing its goal of galvanizing itself as the leading global power.

The Chinese are actively pursuing a scheme to expand China's One Belt One Road into new areas by promising loans and investments to countries struggling economically. More on the size and implications of their risky initiative in the article below.

https://brucewilds.blogspot.com/2019/04/china-is-cutting-path-forward-through.html
A new reply to this comment has been posted.
Henry Rech May 23, 2019

It is probably fair to say that China's BRI is financed by its huge accumulated foreign exchange holdings. To the extent that these are run down and it trade imbalances with the West are reduced, it will have truncated capacity to advance its BRI. There will be limits.

China has the potential for greatness. It must eschew its desire for domination. Domination does not equate with greatness.

Its desire for domination has driven it to appalling excesses internally and military adventurism in the South China sea, threatening Taiwan, annexation of Tibet).

If its BRI is also driven by its desire for domination, it will fail.

China has the potential to be a force for prosperity, stability and peace in the world. Whether it can contribute thus is a matter of its own choosing.
- P. Kamath May 23, 2019
  
  Yes, your darned little comment says it all. It also has been the fond wishes of majority of mankind too- no conflict, no war, peace, prosperity and justice for all, so on! Excellent summary.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
P. Kamath May 22, 2019

The author makes good points here.

No one can deny well concealed uglier facets of Communist China re: authoritarian, genocidal behaviour towards its occupied states like Tibet, unacceptable state of human rights, bullying weaker states around South China Sea and protecting universally condemned religious terrorist in her client state Pakistan. Yet China deserves praise for her efforts in the past decades, to raise millions out of dreadful poverty at home and for her efforts to build a global BRI infrastructure on which future strength of China would rest. It is using her well earned wealth indeed. Compare this to what some oil rich ie Saudi Arabia- which has invested in building mosques and Madrassas in many countries to preach conservative and harmful ideologies!
What seems going well in poor , corrupt, incompetent countries in Asia, Africa that receive BRI funds , may run into rough weather in countries in Europe. We shall see - que sera, sera!
A new reply to this comment has been posted.

https://prosyn.org/R4IrqdBes

¿Puede la Iniciativa del Cinturón y Ruta de la Seda convertirse en una trampa para China?

Subscribe to PS Digital

China’s Debt-Trap Diplomacy

New Comment

Contact us

Log in/Register

¿Puede la Iniciativa del Cinturón y Ruta de la Seda convertirse en una trampa para China?

Subscribe to PS Digital

Edit Newsletter Preferences

Set up Notification