ZCZC
BCN-30
CHINA-TRADE-DIPLOMACY,LEAD
China defends Belt and Road but vows to battle debt
BEIJING, April 25, 2019 (BSS/AFP) – China launched on Thursday a staunch
defence of its Belt and Road global infrastructure project as it opened a
summit with a pledge to ease concerns about debt linked to its signature
foreign policy.
President Xi Jinping’s pet project is a reboot of the ancient Silk Road to
connect Asia to Europe and Africa through massive investments in maritime,
road and rail projects.
The initiative offers to bring much-needed modern infrastructure to
developing countries, but the United States has dubbed it a “vanity project”
and critics warn it is a “debt trap” favouring Chinese companies.
Huang Kunming, a member of China’s powerful Politburo, said at the opening
of the three-day Belt and Road Forum in Beijing that there have been “some
misunderstandings and unfounded rumours” about BRI that they hope to clear
up.
But in a nod to the concerns over loans, Finance Minister Liu Kun said
China would release a framework to “prevent debt risks,” according to state-
owned China Securities Journal.
The “debt sustainability analysis framework” encourages Chinese financial
institutions and BRI countries to voluntarily improve debt management levels,
the report said.
China must properly address “issues of environmental protection and debt
management that the international community pays close attention to,” said
Zheng Zhijie, governor of the China Development Bank.
The state policy bank has doled out much of the Belt and Road-related
loans since 2013, with Zheng saying it had extended $190 billion in financing
to 600 projects.
– Debt trouble –
International Monetary Fund chief Christine Lagarde said Liu’s
announcement and China’s increased focus on the long-term success of BRI
projects were “very welcome steps in the right direction.”
Lagarde told the forum that “sound financial regulation, transparent rules
for investment, and attention to fiscal sustainability” were needed to
successfully open capital markets, according to her prepared remarks.
Leaders from 37 countries have begun to arrive in Beijing for the three-
day forum, with officials from scores of other nations in attendance.
Russian President Vladimir Putin and Italian Prime Minister Giuseppe
Conte, whose country became the first G7 member to sign up to Belt and Road,
are among the headliners.
But EU powers Germany and France are sending ministers instead, while the
United States has not dispatched any officials from Washington.
“We call upon all countries to ensure that their economic diplomacy
initiatives adhere to internationally-accepted norms and standards, promote
sustainable, inclusive development, and advance good governance and strong
economic institutions,” a US embassy spokesperson said.
Since Xi launched Belt and Road in 2013, China has invested $90 billion in
projects while banks have provided between $200 billion and $300 billion in
loans, according to Chinese officials.
But examples of debt trouble abound.
Sri Lanka turned over a deep-sea port to China for 99-years after it was
unable to repay loans. Pakistan needs an international bailout.
And Montenegro has had to make difficult choices after taking on crushing
Chinese debt to pay a Chinese company to build a new highway.
BSS/AFP/HR/1350