“In the decade since Chinese leader Xi Jinping announced the Belt and Road Initiative, Beijing’s huge infrastructure and investment program has become a defining part of its foreign policy. In the BRI’s early years, dozens of emerging economies in Africa, Asia, and Latin America embraced the program, driven in large part by Beijing’s no-questions-asked approach to lending for megaprojects such as container ports, railway networks, and large-scale dams, and its seemingly limitless financial firepower. The lending spree caught Washington and its democratic partners by surprise, prompting wide concern that Beijing was saddling countries with unaffordable debt while financially backstopping authoritarian friends.
“But the BRI lending wave has receded surprisingly quickly. China’s overseas infrastructure lending is now a fraction of what it was five years ago, driven down by the country’s domestic economic woes, by Beijing’s drastic (and widely underappreciated) 2016–17 retooling of its regulations for overseas investment, and by a series of high-profile BRI failures in countries from Ecuador to Sri Lanka. Beijing is not giving up on Belt and Road—far from it. But today, the BRI of the popular imagination—a dominant, globe-spanning infrastructure lending project aimed at cementing China’s power—is effectively dead. In its place is a less flashy, less expensive model of engagement, predicated on cultivating ties more organically in fields such as trade, telecommunications, green energy, and academia.
“Policymakers in both developed and emerging economies should take note. Leaders across the global South seeking new financing from China should exercise caution, given that Beijing is increasingly unlikely to sign on to fund big infrastructure projects. The United States and its industrialized partners will have to contend with a shifting paradigm of Chinese influence—one that is moving away from infrastructure megaprojects toward more diffuse, more sustainable engagement. And both groups will need to work together to address the legacy of Beijing’s lending spree, which has fueled corruption, encouraged antidemocratic practices, and saddled recipient states with enormous debts. …”
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