I'm Robert Lawrence Kuhn and here's what I'm watching: The latest pushback in Western media against China's Belt and Road Initiative, BRI, builds much-needed infrastructure in less-developed countries, which is vital for rectifying gross imbalances in the world.
Foreign reporting has China's BRI being buffeted by geopolitical backlash, excessive debt that needs to be restructured, weak projects, environmental challenges, and various scandals.
A recent report in The Financial Times asserts that, as a result, "China has drastically curtailed the overseas lending program of its two largest policy banks." No doubt, China is making adjustments, both structurally and financially, as it gains more experience from hundreds of BRI projects, and, of course, the COVID-19 pandemic has affected all economies worldwide.
In particular, China's Big Four commercial banks are now playing a more active role in selecting, funding and monitoring BRI projects, taking over responsibilities from China's policy banks as BRI projects are selected more on commercial criteria. This makes BRI more sustainable long term.
In June, China's foreign ministry said that about 20 percent of all BRI projects had been "seriously affected" by the coronavirus pandemic, with 40 percent "adversely affected" and 30-40 percent "somewhat affected," with Foreign Minister Wang Yi stressing that "key Belt and Road infrastructure projects would be restarted as early as possible" to "help countries preserve jobs and contribute to economic stability."
More recently, Wang stated, "No matter how the global situation changes," China's determination to promote BRI international cooperation has not changed. He added that the next stage will feature the Digital Silk Road as a priority, including e-commerce, digital traffic corridors, cross-border optical cable information channels, and China-Asia information ports. While Western concerns revolve around what's referred to as "digital authoritarianism," China says it wants to help developing countries accelerate their digital infrastructure – which China excels at – because there is no better way to achieve rapid development.
The irony is that while the pandemic has hobbled economies of BRI countries, pressuring current projects, the crisis is driving demand for new projects, especially sustainable infrastructure and digital connectivity, generating new opportunities for Chinese banks and telecoms, internet and e-commerce companies.
For a host of reasons, China will continue to develop the Belt and Road Initiative, though it will continue to make mid-course corrections, like tasking commercial banks to take the lion's share of funding from the policy banks, which aligns well with making BRI projects more commercially viable and accountable.
Moreover, the BRI is President Xi Jinping's signature foreign policy creation, and it has been inscribed in the Party Constitution.
China experts appreciate the significance of this. I'm keeping Watch. I'm Robert Lawrence Kuhn.
Scriptwriter: Robert Lawrence Kuhn
Cameraman: Conor Charles, Morgan Compagnon
Video editor: Hao Xinxin
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