BRI loses steam, no fresh Chinese investment post-Covid pandemic

Nine years after it was launched by President Xi Jinping, the Belt Road Initiative (BRI) appears to have lost steam with virtually no new Chinese investment in third countries post-Covid pandemic.

While a section of Beijing watchers believe that this is an indicator of the hit that the Chinese economy has taken during the pandemic and as a result of its zero-Covid policy, the BRI appears to be under revaluation with recipient countries wary of the debt trap and its economic feasibility.

Bangladesh Finance Minster AHM Mustafa Kamal has publicly blamed economically unviable Chinese BRI projects for exacerbating economic crisis in Sri Lanka. 

He has warned that developing countries must think twice about taking more loans through BRI as global inflation and slowing growth add to the strains on indebted emerging markets.

Fact is that Bangladesh has made it clear to China that it is not willing to accept any further loans but only grants from Beijing.

The same pitch has been taken by Nepal as the Chinese debt trap looms large and economic collapse of Sri Lanka, which owes 10 per of its USD 51 billion external debt to Beijing, has become a classic example.

The white elephant of Hambantota port in Sri Lanka is now under 99 year Chinese lease post 2017 under debt for equity swap with more than a billion dollar Rajapaksa international airport a nonstarter.

Another country that its reeling under Chinese debt is Pakistan with some USD 53 billion being spent by Beijing under the aegis of BRI on projects which are nowhere near fruition.