The Belt and Road Initiative (BRI) is the great project of this century and the project has entered into its fifth anniversary. Many things have been happening and the project has the capacity to further include a large number of people. The idea floated by the Chinese President Xi Jinping in Kazakhstan and Indonesia in 2013 has gained strength and will continue. The project aims at helping out the poor economies and in the long run, enable them to pay back their debits, if any. 

The BRI gives space and technology to poor countries and builds their finances. Habantota Port in Sri Lanka provided Sri Lankans with great help.  Tajikistan has been given loans to build its projects. In its own style, Malaysia has cancelled its projects worth US$ 23 billion signed by country’s previous regime. Malaysia has come up its own way of solution. However, the Malaysian example has not repeated by any other country. 

This does not mean that all countries under the BRI have been reconsidering to review its loans plan. There might be minor relocation depending on the situation. The  Kyauk Pyu Port in Myanmar has been bestowed with US$ 1.3 billion. The port is a strategic one diverting the import of oil from the Middle East to Myanmar to reach Yunnan Province in China, by passing the Strait of Malacca. The project will be financed by the private sector and the room for investment has been increasing. 

There are a number of major projects being taken up by regional governments and the momentum is scaling. The BRI is yet a master plan and it is going quite well. The plan has been based upon case-by-case basis depending on individual countries’ needs and requirements. An Action Plan 2015-17 issued by the Chinese Government’s Leading Group for Advancing the Development of One Belt One Road contains instructions such as “share responsibilities and progress together”. 

China has a mechanism to run a BRI project. Various institutions get to work and to coordinate with each other including international components. The early implementation of any BRI project depends on this mechanism. State owned enterprises took on projects quickly and gave out loans. The China Banking and Insurance Regulatory Commission recently estimated that Chinese banks had lent US$ 200 billion for 2,600 projects. Even then, not all Chinese overseas investments are State-funded. Private investors and ethnic Chinese from outside China are also involved, thus making the Chinese loans for BRI as multinationals, going beyond the border of China. 

When Chinese companies within China and outside of China conduct a combined business this will enhance its chances of oneness and transparent liquidity, giving it name of multinationals. In Cambodia, construction there is mostly done by Chinese workers; Chinese tourists arrive in groups managed by Chinese tourist agencies, stay at Chinese-owned hotels, shop at Chinese-owned malls and eat at Chinese restaurants. All these activities are collectively on China and the BRI pattern. 

The BRI is largely fuelled by China’s large trade surpluses and foreign-exchange reserves and many other outcomes as a great state. The country needed somewhere to invest its money and to export its industrial surpluses in befitting manner.  Therefore, the BRI critics just cannot blame China on these accounts. 

The Chinese capital has a lasting value to be invested all over the world. There is nothing wrong about it as the US dollar also does its global business. The work by Chinese Yuan is also admirable. China has not been keeping its Yuan at home; rather China is allowing its Yuan to create prosperity abroad. 

China has not been creating a debt-trap strategy, rather Chinese Yuan is badly needed to overcome poverty, create more jobs, and to create prosperity. China has also been following a policy of write-off of loans. This will not only create prosperity, it will also create a situation for a better competition. No country in the global community would be allowed to sit idle and not to contribute.  

Where the US dollar has not created life and prosperity for decades for many countries, the Chinese Yuan has the capacity to create such a miracle and to share with the a large community. Historically, Chinese Yuan has not created its sphere of influence, exploitation, and discrimination among the community of nations in the past. 

The vast and dedicating act of Yuan will create a better world. The Western financial institutions are creating a difficult situation for developing debt-oriented economies. In the systematic debt situation, countries became further indebted and they cannot come out of that situation. In that situation, Chinese model of debt and loans creature a better situation for the developing countries. 

China is also one of the biggest investors in the African continent. Beijing pledged US$ 60 billion in 2015 and another US$ 60 billion recently for further development. This is great picture of creating a better world in Africa and contributing in its prosperity. Therefore, in a nut shell, we can assume that Chinese strategy of debt and loans disbursement is a blessing and greatly contributing to the world. 

 

The writer is Consultant at the Institute of Strategic Studies Islamabad. He writes on East Asian affairs.