KUALA LUMPUR, April 24 — Beijing is bracing for accusations that its Belt-Road Initiative (BRI) projects abroad are Trojan horses for so-called debt traps when 37 partner nations converge for a forum on the ambitious geopolitical plan this week.
Malaysia’s recent renegotiation of the East Coast Rail Link (ECRL) with China that resulted in a RM21.5 billion reduction is being seen as a planted flag for emerging economies that have accepted the superpower’s aid to develop infrastructure.
While Malaysia’s ability to win the concession has heartened observers, they also noted that the country had to cede half the ownership in the operations to China Communications Construction Company Ltd (CCCC).
The Financial Times (FT) reported China’s foreign minister, Wang Yi, as saying Beijing has planned side events and progress reports for ongoing projects to counter such allegations.
“It’s unavoidable [BRI] will cause some worries during its development,” Wang said. “So we welcome all sides to come up with constructive suggestions.”
Views that the BRI is China’s backdoor into developing economies hungry for funds arefuelled by the lack of participation other than the Asian superpower’s direct investments in these projects.
Despite being billed as a modern-day “Silk Road”, there is also no entity or organisation to coordinate this connectivity; instead, all roads lead proverbially to China.
The issue traces back to China President Xi Jinping’s effusive description of the BRI on its introduction in 2013, when he spoke of it in expansive terms that went beyond pure trade and touched on geopolitical considerations.
Years on, China is still struggling with this view, forcing representatives to defend the BRI’s motives at every opportunity.
Even some in China are unclear about what it is exactly the BRI is setting out to do.
“What is the Belt and Road? Is it an international institution or more of a loose structure like the G7, or is it just a forum? I think that isn’t settled yet,” Victor Gao, a foreign affairs commentator and former foreign ministry official, told the FT.
Ahead of Prime Minister Tun Dr Mahathir Mohamad’s visit to China for the forum, Deputy International Trade and Industry Minister Ong Kian Ming has said Putrajaya wants more transparency in the BRI and its projects.
Ong noted that the mobilisation of resources for the BRI was arguably on a scale unmatched since World War II.
“More transparency helps deal with a backlash in case questions are raised about financing,” he said during a forum here this month.
Aside from Malaysia’s prior reluctance to proceed with the ECRL due to the debt Dr Mahathir said would “impoverish” the country, other developments such as in Sri Lanka have fuelled the perception that BRI projects are ticking financial time-bombs.
The South Asian nation, which was hit by deadly terrorist attacks on Easter Sunday, is under pressure to service some US$5 billion (RM20 billion) in debt due soon and is increasingly turning to China for more cheap loans.
Zhang Chenxu, a deputy general manager of China’s Exim Bank that is financing 1,800 BRI projects including the ECRL, rejected such views.
“Some people saw that the host country borrowed foreign debt, and then guessed at the speed of accumulation and the sustainability of the debt itself, and then claimed that pushed the host country into a debt trap,” Zhang told the FT.
“We can see the gap between their logic and the facts.”