October 21, 2017 2:31 AM
A worker works on the electrified light rail transit construction site in Ethiopia's capital Addis Ababa, Dec. 16, 2014. The project, built by China Railway Engineering Corporation (CREC) and mostly financed through a loan from China's Exim Bank, is a rarity on a continent plagued by poor transport links.
Running 1,300 kilometers over the world’s highest mountain pass, the “Friendship,” or Karakoram, Highway is evidence of China’s willingness to spend big as a contributor to global development.
Costing tens of billions of dollars, the road links western China with Pakistan, part of Beijing’s “One Belt One Road” Initiative, which seeks to rekindle ancient Silk Road trade routes linking China with Europe and Africa and is a central tenet of President Xi Jinping’s leadership, said professor Steve Tsang of London’s School of Oriental and African Studies.
“The government is committed to do whatever it can to make sure that it is successful,” Tsang said. “So a lot more money and resources will be put into it to support that.”
But figures show that since the Karakoram Highway was built, Pakistani exports to China have fallen while imports have increased, raising concern China’s new Silk Road could become a one-way street.
WATCH: China to Spend Billions More on 'One Belt' Initiative, but Campaigners Want Focus on Poverty
Stephen Gelb of the Overseas Development Institute says Beijing should focus its investments on global development goals.
“At the moment there’s a lot of focus on infrastructure and particularly transport, pipelines, that sort of thing, which don’t directly address poverty,” Gelb said. “And in fact there’s been in some cases some controversy about the social and environmental impacts. But I think the focus should be to address development, including poverty and related issues.”
Gliding above the choking traffic of the Ethiopian capital, Addis Ababa, the Chinese-funded tramway system opened last year at a cost of half a billion dollars. Beijing says investments like this will boost African economies, thereby alleviating poverty.
Gelb says it is also part of China’s plan to become a dominant force on the global stage.
FILE - Chinese President Xi Jinping toasts during a reception at the Great Hall of the People on the eve of the Oct. 1 National Day holiday in Beijing.
“It was affirmed in Xi Jinping’s speech (this week to China’s Communist Party Congress),” he said, “China’s very much about these days rules-based global governance, multilateralism, globalization.”
Visiting India this week, U.S. Secretary of State Rex Tillerson accused China of not always playing by those rules.
“China, while rising alongside India, has done so less responsibly, at times undermining the international, rules-based order,” Tillerson said.
Paying the piper
Recipient countries have welcomed Chinese investment, which sometimes comes with fewer conditions than Western aid, such as demands for democratic reform. But Tsang warns there could be a sting in the tail.
“The real issue will come when some of those countries, particularly in central Asia, have to pay back some of the loans that were acquired in the Belt and Road Initiative,” Tsang said. “And most of those countries will have problems paying back those loans.”
For now, Chinese investment continues to expand. Development campaigners say Beijing’s focus should be not only on ports and pipelines but on tackling poverty