Dharamshala, 29th November: The BRI is primarily a debt-financed initiative, with the CDB and China EXIM as key lenders, as well as several state-owned commercial banks. While such loans are not attached to any political or economic reform, they are not primarily development-oriented and are intended to generate a commercial return. China’s unwillingness to cancel the debt, even in the midst of the largest humanitarian disaster since the COVID-19 epidemic, and its preference for offering grace periods and rescheduling repayments, as well as prolonging the term of debt and lines of credit, demonstrate this.
The majority of BRI projects are granted to Chinese companies, confirming Beijing’s assertion that such projects are open to universal bidding and foreign collaborations to be false. In fact, according to a survey of BRI contractors, 89 percent are Chinese, 7.6 percent are local companies headquartered in the host nation where the project is being carried out, and 3.4 percent are foreign companies, essentially non-Chinese, from countries other than the one where the project is being carried out.
It has been stated that BRI projects recruit Chinese workers rather than locals. The fact that China has a strong footprint on the African continent is widely known. By the end of 2019, some 182,000 Chinese were employed in Africa. As of 2019, almost a million Chinese workers were officially employed in foreign countries, with many more working unofficially. The nationality of the personnel on BRI projects, on the other hand, is projected to vary by area. To address the domestic oversupply, a bigger share of the Chinese workforce is projected to be hired by large-scale infrastructure projects carried out by Chinese state-owned businesses. Working conditions have been described as dismal whenever local labor is employed. This is also true with Chinese labor. In reality, in some locations, favoring Chinese labor over local labor may be due to their relative vulnerability.
By addressing physical and transformational barriers, the BRI promised to improve global GDP, lower global trade costs, and turn host countries into globally competitive economies. The promise was that the BRI countries’ economies would rise faster. Rather, the BRI has sparked a debt crisis in the host countries by exacerbating existing debt difficulties and making them unsustainable. The pandemic-induced catastrophe has only exacerbated the issue. Where is the BRI-promised economic growth? Such growth would have helped to alleviate the debt concerns that the BRI countries were facing.
The international community must put pressure on China to publish its carbon footprint in BRI projects. Because everyone is affected by climate change, these less-developed BRI countries will be forced to manage the trade-off between global warming and economic growth. China must be required to ensure that the BRI provides genuine development benefits to the host countries while staying within their carbon budgets. China must also follow through on its commitment to make the BRI a “green” effort, something it has so far largely avoided.
Information Based on ORF research and analyses