The Chinese mega-project "One Belt, One Road", which includes a comprehensive program for the development of China's trade with the whole world and involves large-scale investments in the development of transport and logistics infrastructure, has led to China's losses in the region of $100 billion. The Chinese authorities lost these funds on write-offs and restructuring of loans that were issued for the development of the project, writes the British Financial Times, citing data from research organization Rhodium.
Moreover, in recent years, the losses of Chinese investors in the project have grown more than 4 times: over the past three years, Chinese banks have written off or were forced to restructure loans for $78.5 billion, while in the period from 2017 to the end of 2019 they wrote off only $17 billion. Beijing has never officially released overall data on the size of lending under the One Belt, One Road program, but economists estimate this amount at about $1 trillion, which means that China has lost almost 10% of the allocated funds.
The publication also notes that $1 trillion is not the final cost estimate, as it does not include the so-called "rescue loans" to prevent defaults by large Chinese borrowers from about 150 countries implementing projects under the One Belt, One path". In total, according to a joint study by AidData, the World Bank, the Harvard Kennedy School and the Kiel Institute for World Economics, China spent about $240 billion on bailout loans between 2000 and 2021, with a significant portion (about $104 billion) falling between 2019 to 2021.
Experts note that countries are becoming dependent on China, as it becomes more difficult to cover loans due to a slowdown in the global economy, rising rates of world central banks and record debts in developing countries. At the same time, within the framework of international institutions, China often blocks opportunities for restructuring the debts of developing countries, but as part of its initiative, on the contrary, it encourages restructuring in every possible way, increasing the dependence of developing countries on Beijing.
“Honestly, I think this is just the beginning. Chinese banks are interested in keeping their largest foreign borrowers with the money to continue servicing their debts on infrastructure projects. As such, Beijing is likely to engage in emergency lending while its biggest borrowers are in financial distress,” said AidData chief executive Brad Parks.
Despite the reduction in project funding under the program, as well as the slowdown in the restructuring of loans to developing countries, economists do not believe that Beijing will reduce its influence on its partners under the "One Belt, One Road". On the contrary, given the slowdown in the economy, they will continue to welcome Chinese investment.
“Many countries still welcome investment from China through the initiative, and I don't see that changing,” said Francesca Ghiretti, an analyst at Berlin-based think tank Merics.
In 2023, China will celebrate the 10th anniversary of the Belt and Road Initiative. Experts are waiting for summing up and new large-scale plans within the framework of the initiative. Beijing, as the newspaper notes, is likely to use the event to once again emphasize its dominant role in the global economy. At the same time, experts admit that it is not worth expecting new investments so costly for Beijing, since due to the technological blockade by Western countries, money can go to the development of the technology industry.
However, the political success of the initiative is obvious, writes the Financial Times. Almost all countries implementing projects under the One Belt, One Road program also support other Chinese international initiatives – for example, the Chinese idea of \u200b\u200bcollective security, which consists of six principles. The concept of Global Security was officially presented in February 2023, but Chinese leader Xi Jinping spoke about its outlines as early as April 2022. During the year, representatives of 70 countries declared their support for the initiative, most of them are China's partners in the One Belt, One Road program.