Chinese spending on belt and road projects remained low in first six months, report says

Total financing and investment was US$28.4 billion from January to June, down 40 per cent from 2019

There was no Chinese spending in Russia, Sri Lanka and Egypt in this period, according to Fudan University’s GFDC

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A Chinese labourer pictured at a construction site for Egypt’s new administrative and financial capital near Cairo, a belt and road project, last year. There was no Chinese investment in the country in the first half of this year, according to a report. Photo: EPA-EFE

Published: 8:00pm, 25 Jul 2022

Chinese financing and investment under its Belt and Road Initiative remained at low levels in the first half of the year, and there was no spending at all in Russia, Sri Lanka and Egypt, a new study has found.

Total financing and investment stood at US$28.4 billion in the first six months, down slightly from US$29.4 billion a year earlier, according to a report by Fudan University’s Green Finance and Development Centre (GFDC) in Shanghai, released on Sunday. It was 40 per cent lower than the same period in 2019.

It comes amid warnings from observers that a deepening US-China feud in combination with an economic downturn at home – worsened by Beijing’s tough response to Covid-19 outbreaks – will add to pressure on its belt and road foreign policy and investment strategy.

The study also cast doubt over the initiative’s prospects. “For the rest of 2022, despite continued lockdowns, particularly in China, with the continued uncertainty of Covid-19, and continued issues of sovereign debt, as well as the Ukraine war, further recovery of [belt and road] investments requires caution,” the report said.

It said investment and spending under the programme would be unlikely to return to 2019 levels.

China has spent US$932 billion on President Xi Jinping’s signature project since it began in 2013 and it now involves 147 countries, according to the report.

Middle Eastern nations received 57 per cent of the Chinese investment this year, with Saudi Arabia the single largest recipient at about US$5.5 billion, which mostly went to gas and other energy projects.

Southeast Asian nations saw their share of Chinese investment drop, from nearly 49 per cent two years ago to about 10 per cent this year.

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