Investments in infrastructures in the area of the “New Silk Roads” fall. Sub-Saharan Africa is one of the regions where the decline is most pronounced. You are feeling the weight of competition from the US and the EU, Beijing’s economic difficulties and fears of debt in many partner countries.
Beijing () – The “Belt and Road” initiative is losing steam as Chinese investments in partner countries fall. In 2013, Xi Jinping launched the “New Silk Roads” project to make China the center of world trade, thus reinforcing its geopolitical status vis-à-vis the United States.
The Belt and Road is based on building infrastructure to connect the whole world with China. However, from the pre-pandemic period to date, the flow of Chinese funds has fallen sharply, from $46.2 billion in 2019 to $28.7 billion last year, reports the China Global Investment Tracker.
The reduction especially affects sub-Saharan Africa. According to the Green Finance and Development Center of Shanghai Fudan University: between 2021 and 2022, infrastructure investments in the region fell by 55%, falling to $7.5 billion.
Among the reasons for the decline is competition from the United States, the EU and the G7 countries, which have intensified their development commitments in Africa in the past year. Beijing is going through economic difficulties and has decided to select its financial interventions in the “Southern Hemisphere” more carefully, the area of the globe most affected by its diplomatic action.
We must also not forget that the conditions that China offers for its loans and investments are often controversial. Beijing charges higher interest rates and requires that Chinese personnel and materials be used.
Finally, the financial situation of the countries that receive the investments must be considered. According to Maybank’s calculations, 60% of Chinese loans abroad have gone to states with debt problems. Several economists point out that this, together with the fear of the growing influence of Beijing, leads, for example, the countries of Southeast Asia to be more cautious about the Belt and Road.
