Home / FT View/ Belt and Road project

Belt and Road project

Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 4 September 2018 00:21

China’s One Belt One Road project, which has just marked its fifth anniversary, is seen as undergoing some interesting changes as it looks at continuing to build one of the largest infrastructure linkages ever attempted. Perhaps the most significant is an announcement by Chinese President Xi Jinping that funds should not be used for “vanity projects”, following heightened criticism over funds being used for questionable projects by host countries. 

While many developing countries in Southeast Asia and Africa have welcomed the investment, usually funnelled into large infrastructure ventures, as boosting growth and connectivity, critics have pointed out the projects under the Belt and Road Initiative increase debt significantly, usually for countries that are not always able to absorb it. 

Chinese projects have also been criticised for being run by large State corporations with little transparency. These companies frequently import labour, which gives limited access to local labour, and have been accused of pushing out local companies. Projects have also been slammed for causing environmental issues. 

Dissenting views gained greater traction after Sri Lanka handed over the Hambantota Port last year on a 99-year lease to a Chinese company as part of a joint venture, partly because it would assist with debt repayments. The Government is also searching for an investor for the Mattala Airport that was also built with Chinese loans. The two are seen as ‘white elephant’ projects constructed during the Government of former President Mahinda Rajapaksa.        

China has denied engaging in ‘debt trap’ diplomacy, insisting its overtures were aimed at working with governments around the world and reducing inequalities. The Chinese President, speaking at the opening of a major summit with African leaders yesterday, promised development that people on the continent could see and touch, but that would also be green and sustainable. 

During the speech, Xi also offered $ 60 billion in new investments, but these would be spread out over a range of options including $ 15 billion of aid, interest-free loans and concessional loans, a credit line of $ 20 billion, a $ 10 billion special fund for China-Africa development, and a $ 5 billion special fund for imports from Africa.

He also said Chinese companies would be encouraged to invest no less than $ 10 billion in the continent in the next three years. Government debt from China’s interest-free loans due by the end of 2018 would be written off for indebted poor African countries, as well as for developing nations in the continent’s interior and small island nations, he assured. China will also carry out 50 projects on green development and environmental protection in Africa, focusing on fighting climate change, desertification and wildlife protection, according to international media reports. 

The availability of funds for a range of projects appears to be a strong indication that China is attempting to evolve its Belt Road Initiative. Chinese officials have vowed to be more cautious to ensure projects are sustainable, but vanity projects will remain a constant worry for developing countries with little transparency, weak institutions, and limited public engagement unless stronger steps are taken to increase engagement and access. Governments headed by strongmen may appear attractive, but they can also be extremely damaging to democratic processes that promote public interest. It is only by increasing transparency that vanity projects can be wiped out.  

Share This Article


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Maximum Residue Level: Dilemma of agricultural product exporters in Sri Lanka

Wednesday, 19 September 2018

Due to increased emphasis on consumer health, majority of developed countries such as EU, Japan and the US insist on MRL testing of food items which has to be done by the exporter. The Codex Alimentarius Commission which is an inter-governmental bod

East Container Terminal blunder: Learn from Chinese

Tuesday, 18 September 2018

Minister for Ports and Shipping Mahinda Samarasinghe informed the press in August that Cabinet has approved the development of East Container Terminal (ECT) of Colombo Port by the Ports Authority. According to approval: nPorts Authority would develop

President Sirisena, playing with fire, must take note that smoke will get into his eyes

Tuesday, 18 September 2018

Penchant for playing with fire President Gamaralalage Sirisena has always had a penchant for playing with fire. He did fire-play at the local government elections when he made a disastrous U-turn and went round country blasting the party and its lea

Response to claims that Sri Lanka was in a ‘debt trap’ in 2014 due to ‘Chinese loans’

Monday, 17 September 2018

Several Western analysts have carried out a relentless media campaign in keeping with their own geopolitical agenda, to suggest that China was luring Sri Lanka into a carefully engineered debt trap.

Columnists More