Is China downsizing funding into its Belt and Road Initiative in Africa
- 7 months ago
Is China downsizing funding into its Belt and Road Initiative in Africa?
China has poured billions into Africa's infrastructure through its Belt and Road Initiative.
But is it now downsizing its funding?
Researchers from the Boston University Global Development Policy Center have tracked a decline in new loan commitments from Chinese entities to African government borrowers.
These new loans fell from a peak of $28.5 billion in 2016 to just under $1 billion last year.
The researchers suggest that this decline may not just be due to the pandemic, but a broader shift toward fewer large-scale loans.
Report author Oyintarelado Moses says, "The Belt and Road Initiative does appear to be in recalibration mode."
Debt repayment issues, global economic headwinds, China's own financial woes, and the need to address environmental issues are among the new pressures on China's lending and countries' borrowing.
Policymakers will be looking to a major international forum focused on the Belt and Road Initiative next month in Beijing for signs of what's next.
China launched the Belt and Road Initiative in 2013, pouring billions in loans into infrastructure projects across the developing world.
However, new economic realities, such as rising interest rates and commodity prices driven by the war in Ukraine, are at play.
Ammar A. Malik, a senior research scientist at AidData research lab, says that China's challenge now is to ensure that countries are sufficiently liquid and projects are functional enough for China to collect repayments with interest and on time.
As representatives from over 100 countries gather in Beijing for a Belt and Road forum next month, signals of how the initiative will evolve will be closely watched.
Analysts suggest that China may place more emphasis on environmental issues, better social protections, and due diligence.
Future lending to Africa could mean fewer large-scale loans and more loans with smaller values and beneficial social and environmental impacts.
However, China is likely to continue directing funding in alignment with its geopolitical aims, especially in areas where it is vying for influence against the United States.
While there may be a decline in the scale of loans, there are still considerable pockets of Belt and Road Initiative enthusiasm.
If Chinese policymakers and project leaders have made serious investments to improve how they manage these projects, new ones should benefit from past lessons learned.
The future of China's funding in Africa and the Belt and Road Initiative will be closely watched by policymakers and developing countries in need of infrastructure funding.
#latestnews #news #cnn
China has poured billions into Africa's infrastructure through its Belt and Road Initiative.
But is it now downsizing its funding?
Researchers from the Boston University Global Development Policy Center have tracked a decline in new loan commitments from Chinese entities to African government borrowers.
These new loans fell from a peak of $28.5 billion in 2016 to just under $1 billion last year.
The researchers suggest that this decline may not just be due to the pandemic, but a broader shift toward fewer large-scale loans.
Report author Oyintarelado Moses says, "The Belt and Road Initiative does appear to be in recalibration mode."
Debt repayment issues, global economic headwinds, China's own financial woes, and the need to address environmental issues are among the new pressures on China's lending and countries' borrowing.
Policymakers will be looking to a major international forum focused on the Belt and Road Initiative next month in Beijing for signs of what's next.
China launched the Belt and Road Initiative in 2013, pouring billions in loans into infrastructure projects across the developing world.
However, new economic realities, such as rising interest rates and commodity prices driven by the war in Ukraine, are at play.
Ammar A. Malik, a senior research scientist at AidData research lab, says that China's challenge now is to ensure that countries are sufficiently liquid and projects are functional enough for China to collect repayments with interest and on time.
As representatives from over 100 countries gather in Beijing for a Belt and Road forum next month, signals of how the initiative will evolve will be closely watched.
Analysts suggest that China may place more emphasis on environmental issues, better social protections, and due diligence.
Future lending to Africa could mean fewer large-scale loans and more loans with smaller values and beneficial social and environmental impacts.
However, China is likely to continue directing funding in alignment with its geopolitical aims, especially in areas where it is vying for influence against the United States.
While there may be a decline in the scale of loans, there are still considerable pockets of Belt and Road Initiative enthusiasm.
If Chinese policymakers and project leaders have made serious investments to improve how they manage these projects, new ones should benefit from past lessons learned.
The future of China's funding in Africa and the Belt and Road Initiative will be closely watched by policymakers and developing countries in need of infrastructure funding.
#latestnews #news #cnn