President Xi Jinping toasts at the Belt and Road Forum in Beijing in 2019.
  • annabel van gestel

    news editor

  • annabel van gestel

    news editor

Once the prestigious project of Chinese President Xi Jinping, the fear of many Western countries and the hope of many less prosperous countries, this year celebrates an anniversary: ​​the New Silk Road.

Over the past decade, China has lent hundreds of billions to countries around the world for the construction of infrastructure projects. Despite an energetic start, there is increasing criticism from participating countries. Is there something to celebrate in the tenth year of the New Silk Road?

With the Belt and Road Initiative, As the New Silk Road is officially called, in 2013 China launched the largest infrastructure project in modern history. Countries could turn to China for a loan to build a port, railway or dam, for example, to boost the economy. increase give. For China, it is a way to control trade flows and force a political finger in the pie with member countries.

Since its launch, some 150 countries, mostly developing countries, have registered with China. In dozens of countries a project has been reached. In some countries economic cooperation was achieved and there were also many dropouts. Many of those countries turned to China because they couldn’t get financing from, for example, the International Monetary Fund or the World Bank.

“China was willing to put a lot of money into this,” says Frans-Paul van der Putten, a China expert at the Clingendael Institute. “It is beneficial for the developing countries themselves that they are less dependent on Western financiers or the World Bank.”

high debts

However, deals also carry great risks. The projects cost a lot of money and leave countries with hard-to-pay debts. Therefore, last week, the World Bank asked China for debt relief for several countries. Chinese correspondent Sjoerd den Daas: “China has not been prepared to do that until now, because a lot of that debt is on the balance sheet here with state-owned banks. So they will also suffer if those debts cannot be paid.”

On the other hand, partner countries have to wait and see if the port, bridge or highway they have commissioned turns out as expected. Critics have been questioning the quality of the services provided for years. Also, many projects have been delayed.

An example is a hydroelectric plant in Ecuador. The river on which the power station was built has changed its flow, causing the banks to collapse and villages to be destroyed. In addition, the researchers discovered thousands of cracks in the plant’s turbines, possibly caused by the use of substandard material.

Residents of the town of San Luis in Ecuador see more and more land disappearing into the river:

A town is slowly falling apart because of this Chinese hydroelectric power station

The dam in Ecuador is not the only project that led to disappointment. In Pakistan, a hydroelectric power station was closed, also due to cracks, and in Angola, a social housing project fell short of expectations. And because Montenegro couldn’t repay a highway loan to China, construction came to a standstill. A railway line in Kenya proved unprofitable and was not completed.

For those countries that are not satisfied with the delivery of the project, it is difficult to hold China accountable for this, Van der Putten says. “They are tied to a contract, so renegotiation is difficult.”

According to the Chinese side that built the dam in Ecuador, the defects were not caused by them, and the erosion is not due to the construction of the dam. In other projects, defects were also attributed to local businessmen, or due to misuse by the local operator.

The damage to China’s reputation

Van der Putten points out that China has actually started too enthusiastically with too many projects at the same time. “The thinking was maybe: we’ll see what succeeds. I think over time the Chinese government has realized that it was unwise to start many projects at the same time.”

With many projects still in development, Van der Putten believes it is too early to call the entire Silk Road initiative a failure. Yet it seems that China itself, ten years after the big announcement, is drawing less attention to Xi’s prestigious project. “The reputation has been damaged in recent years. China will continue with the projects, albeit on a smaller scale.”

Masterpiece

The correspondent Den Daas also does not believe that China will pull the plug on the New Silk Road. “It’s a seed that Xi planted, and if Xi plants a seed, it has to be watered. You can see that there is less investment and the projects they are investing in now are more profitable.”

The decline in investments may also be a temporary consequence of the corona crisis, emphasizes Den Daas. “There wasn’t much travel and banks were low on cash, so it could be a temporary respite. But the New Silk Road should definitely go ahead, if only because it’s Xi’s masterpiece.”