The world leaders were assembled in Beijing, albeit fewer in number than in previous years. The once soaring rhetoric was also far more subdued. In short, China’s Belt and Road Initiative (BRI), the grand trillion-dollar scheme that would ensure all roads in Asia and parts of Europe led to Beijing or some Chinese corner, has fallen very short of its grand goals. Now, China’s economic slowdown is squeezing President Xi Jinping’s signature initiative even more.

For starters, let’s look at the China-Pakistan Economic Corridor (CPEC) touted as a “win-win” scheme that would transform Pakistan beyond recognition. The plan talked about tourist resorts on the Arabian Sea and fishing ports. There was mention of giant agricultural hubs that would even send food back to China. The investment for these game-changing projects was put at a staggering $62 billion.

Fast-forward and these dreams, along with expectations of fruitful cooperation, have crashed against the hard rocks of reality. CPEC’s more fanciful schemes have morphed into a mundane mix of roads and power plants to help transportation and fix shortages in the electricity-starved nation. The Chinese are reckoned to have built, or are building, eight coal-fired power plants that will produce a total 6,900MW. But Pakistan’s financial and political crises mean it’s finding it tough to pay even for coal to fuel these plants. Financing comes invariably from Chinese banks and the projects are constructed by Chinese companies. Many criticise the projects as too expensive but it’s too late as Pakistan is locked into a vicious cycle of debt-swelling construction that leaves them ever more in hock to China.

Also, about to get under way is a 300 MW coal-fired plant at Gwadar, which will provide power to the port city’s special economic zone. But there’s resentment in Gwadar because large Chinese trawlers are pushing the smaller local players out of the best fishing areas.

Head to Malaysia where the BRI has made on-off progress. Here, projects have been cancelled almost every time a government has changed. The $16-billion East Coast Rail Link, for instance, was scrapped by one government but put back on track after another party took power. The Chinese had to cut the project cost by several billion dollars and there were strong allegations that they had inflated costs heavily. Two gas-line projects appear to have been ditched because they got entangled in a gigantic corruption scandal involving ex-prime minister Najib Razak. The crisis-hit Chinese developer Country Garden is involved in a colossal $100-billion housing project and has missed debt payments. The company insists its Malaysian unit is unaffected by the company’s crisis in China.

Pushing ahead in Africa

The BRI is moving forward more determinedly in Africa, but with mixed results. A railway line from Kenya’s port city Mombasa to Nairobi has been highly appreciated by passengers but it’s racking up losses because more building is needed to make it viable for freight. Kenya is now stuck with loans of $4.7 billion, mostly to Chinese banks. It needs to spend more to extend into Uganda and make the freight line viable But the Ugandans appear keener on having a freight line heading into Tanzania. The Kenyans are now worrying they’re too heavily in debt to the Chinese and this may affect their economy. It’s much the same story in other parts of Africa.

To get around the excessive debt issue, the Chinese are now moving to the belief that small is beautiful. In Kenya, for example, BRI spending is likely to drop from $216 million in 2022 to a tiny $12.7 million.

The fall is hardly surprising considering that China is going through its worst economic crisis in decades. In other parts of Africa, too, it’s squeezing spending because it can’t afford to pay and the return on investment may be long in coming.

Sensing a potential impending vacuum, the US is looking for ways it can muscle out the Chinese and become the infrastructure benefactor for Africa and elsewhere. The US-led Partnership for Global Infrastructure Investment is still only at an embryonic stage but India is almost certain to be part of the scheme.

India has always stonewalled all attempts to draw it into the BRI. In fact, analysts reckon India’s refusal was one of the early indications that convinced the Chinese we would always keep our distance from them. Now, the Chinese have their own financial house to put in order, it may perceive going slow on its “project of the century” or letting it wither on the vine could be the best option going.

Sensing a potential impending vacuum, the US is looking for ways it can muscle out the

Chinese and become the infra benefactor for Africa and elsewhere.

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