Some people continue to express concern over a perceived debt issue, while others have sought to highlight that coal-fired power plants are being built under the BRI framework.
To be sure, there are others who have taken cognizance of the new economic development opportunities that the BRI would present now as well as in the future, once the dust of the pandemic settles.
A dispassionate overview of the topic, therefore, would be necessary to gain a proper perspective.
China’s non-financial direct investment in other countries along the Belt and Road in 2014-20 (Unit: $1 billion)
No Debt Trap for Participants
In 2020, China’s non-financial direct investment in the countries along the Belt and Road reached US $17.79 billion, up more than 18 percent year-on-year.
From 2014 to 2020, China’s total non-financial direct investment in other countries along the Belt and Road reached US $104.72 billion, with the annual average hittingUS $14.96 billion.
The ratio of China’s outbound direct investment (ODI) in other countries along the BRI routes also increased to more than 16 percent of the country’s total ODI in 2020, from less than 10 percent in 2013, when the BRI was first proposed.
No participating economy that undertook BRI-related construction projects has slipped into a debt crisis. Credit for that should go to the Chinese government’s three principles relating to the joint projects:
First, China does not force any country to join the BRI. Nor does China force any participating country to borrow money from it.
Second, all the investment projects are to be carried out by independent companies, as per the existing market rules, and thus government-to-government lending is rare and based on market mechanisms like international market financing and private-public partnership financing.
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