Iraq top recipient of China’s Belt and Road Initiative financing for infrastructure projects in 2021, study shows
- China’s engagements across Belt and Road Initiative countries stood at US$59.5 billion in 2021, almost the same as US$60.5 billion in 2020, report shows
- China and Iraq are cooperating to build the US$5 billion Al-Khairat heavy oil power plant in Karbala province and also on an airport, solar and other projects
In total, China’s engagement through investments and contractual cooperation across the 144 Belt and Road Initiative countries was US$59.5 billion, in line with the US$60.5 billion in 2020, according to the report by the Green Finance & Development Center at Shanghai’s Fudan University.
However, in Arab and Middle Eastern countries, investment last year rose by about 360 per cent and construction engagement by 116 per cent compared to 2020, the study said.
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China and Iraq are cooperating to build the US$5 billion Al-Khairat heavy oil power plant in Karbala province and China’ Sinopec has won the contract to develop Iraq’s Mansuriya gas field near the Iranian border. The two countries are also cooperating on an airport, solar and other projects.
China’s Belt and Road Initiative contract values in 2021 were US$45.6 billion, up from US$37 billion a year earlier, while investments shrank to US$13.9 billion from US$23.4 billion.
Green energy finance and investment edged up to US$6.3 billion compared with US$6.2 billion in 2020, and China did not engage in coal projects in 2021, in line with President Xi Jinping’s pledge not to build coal-fired plants overseas.
For 2022, the researchers expect an acceleration of green projects, in line with government guidelines, although oil-related finance and investment under Belt and Road Initiative surged to US$6.4 billion in 2021 from US$1.9 billion in 2020.
The Fudan University researchers expect Chinese BRI engagement to decline, citing China’s five-year plan for 2021-2025 to invest US$550 billion abroad including non-BRI countries, down 25 per cent from US$740 billion in the 2016-2020 period.
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Chinese Belt and Road Initiative engagement declined by 48 per cent in 2021 from pre-pandemic levels, the researchers noted.
After Iraq, Serbia and Indonesia were the top targets for BRI construction engagement.
China launched its Belt and Road Initiative in 2013 to boost trade links with the rest of the world and has been spending heavily on the development of infrastructure in dozens of countries around the world.
But some critics say financing offered by Beijing is often unfavourable, not transparent, and makes some poorer countries, especially in Africa, dependent on China through debt.
