China debt: Beijing may cut belt and road lending due to domestic pressure, to ensure future of project
- President Xi Jinping reaffirmed China’s commitment to his Belt and Road Initiative last week at the Asia-Pacific Economic Cooperation (Apec) forum
- But China may need to cut back on overseas lending due to domestic debt concerns and to also ensure future funding is sustainable, analysts say
President Xi Jinping last week doubled down on China’s commitment to his grand foreign policy project, the Belt and Road Initiative, but opinions are split over the sustainability of such investment amid a backdrop of rising debt at home.
“China will further harmonise policies, rules and standards with [Belt and Road Initiative] partners, and deepen effective cooperation with them on infrastructure, industry, trade, science and technological innovation, public health and people-to-people exchanges,” Xi said in his keynote address to the Asia-Pacific Economic Cooperation (Apec) forum.
This ambitious belt and road plan, first introduced by Xi during his 2013 visit to Kazakhstan when it was initially called One Belt, One Road, involves connecting more than 70 countries on the continents of Asia, Europe and Africa via a series of rail, road and sea infrastructure projects, thus forming a New Silk Road. The goal for Beijing is to promote regional connections and economic integration, thereby expanding China’s economic and political influence.
And while China will by no means abandon funding projects, it may cut back on lending, both due to domestic needs and moves to make sure future lending is sustainable, analysts said.