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Time will tell if the BRI's impact is as profound as the Marshall Plan's

Much of this worry stems from the fact that Chinese banks and corporations are the main creditors for BRI projects, so participating countries will incur significant debt to China. The theory that the BRI will lead to growth for participating economies only stands true if infrastructure is required, and provided the projects are financed efficiently.

Over the longer term, perhaps 10 to 20 years out, if these countries are unable to service that debt, China's leverage over them could increase as the main creditor of BRI projects, and the benefit could diminish for these economies.

When nearly complete, the BRI could become China's international political powerbank through the projects it has developed, but also though conditions that could be imposed through the write-off of debt.

The BRI is now becoming more closely scrutinised because of the growing concern around debt associated with BRI projects. The International Monetary Fund has been vocal on this point to China, with its managing director Christine Lagarde recently stating, at a recent conference in Beijing, that Belt and Road should "travel only where it is needed" .

Even the Chinese government, which will make an estimated US$40 billion of equity investments through its Silk Road Fund, will be eager to see a return on this, and is now becoming markedly more careful where it invests.

The Asian Infrastructure Investment Bank (AIIB) will also be a major investor. AIIB has 56 member states and has robust corporate governance standards; as such, the creditworthiness of its investments will be thoroughly scrutinised.

China does not want to build a reputation as a political influencer in BRI countries at this early stage: if some projects don't pay off, Chinese lenders are likely either to extend more loans or roll them over at lower interest rates.

But there is a big question mark as to what will happen if more and more loans are extended over longer periods of time.

It's also worth noting that projects undertaken under the BRI must meet environmental and social standards and safeguards: as a result, investment in power generation, for example, will be focused on renewables, LNG and clean coal.

The hope is that more countries will be won over by the BRI's benefits and will participate. In December 2017, Japan announced financial support for BRI private-sector partnerships as part of an effort to improve ties with China. Cooperation will centre on the environmental sector, industrial modernisation and logistics.

Modern critics of the Marshall Plan suggest that it was less effective than intended, and even that it prevented development in some territories by propping up economically stagnant regimes. However, its success in establishing the US as a dominant influence in the post-war world is not disputed.

The BRI is still in its early stages; there is time to respond to its effects as they take hold, and the early developments are both encouraging and yet alarming. China clearly wants to broaden participation by lenders, and uphold high governance standards, but debt levels of BRI economies have piled up, and this could only build up China's soft power.

Time will tell if the BRI's impact is as profound as the Marshall Plan's. For now there are many reasons to hope so, but also many unknowns.


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