Skip to main content

China slimming down Belt and Road Initiative as new project value plunges in last 18 months, report shows

🔴The value of new projects across 61 countries fell 13 per cent to US$126 billion in 2018, with the figure falling further in 2019, according to Gavekal Dragonomics

🔴The project was launched in September 2013 by President Xi Jinping, but China’a access to available funds has since diminished

Topic | China economy

Cissy Zhou

Published: 8:15pm, 10 Oct, 2019

Updated: 8:46pm, 10 Oct, 2019

The growth of China’s Belt and Road Initiative slowed significantly over the last 18 months as Beijing’s overseas lending flattened out and the value of new overseas construction projects declined, new private-sector research showed, supporting existing theories about the decline of Xi Jinping’s signature plan.


The value of new projects spread across 61 countries involved in the plan fell 13 per cent to US$126 billion in 2018 compared to the previous year, with the figure falling a further 6.7 per cent in the period up to August 2019, according to a report by Gavekal Dragonomics. Existing contracts also dropped 4.2 per cent over the first eight months of 2019.


This is, in part, due to the level of funds available to invest in other countries having fallen sharply, with an International Monetary Fund report published in July showing that China’s current account surplus has dropped to close to zero for the first time since 2012.


In addition, Chinese state banks have become more cautious about lending to projects under the strategy, which is China's plan to grow global trade. Some member countries, including Myanmar, Sierra Leone and Tanzania, are also reluctant to borrow large sums of money due to debt fears, while some have reduced planned borrowings or even cancelled unaffordable projects, the Gavekal Dragonomics report said.

Host countries are becoming more careful about agreeing to Chinese-sponsored projects, as they seek to avoid becoming financially tethered to Beijing

Tom Miller

China committed to making only two Belt and Road Initiative-related loans over US$1 billion in the first half of 2019 – US$1.2 billion to Egypt and US$2.5 billion to Pakistan, according to the report. Overall, according to the China Global Investment Tracker from the American Enterprise Institute, China made 46 loans of over US$1 billion for overseas investment projects in 2016, with that figure dropping to 28 last year.

“On the one hand, tighter financing and more stringent project controls are forcing Chinese construction firms to be more circumspect,” said Tom Miller, a senior Asia analyst at Gavekal Dragonomics and author of the report. “On the other hand, host countries are becoming more careful about agreeing to Chinese-sponsored projects, as they seek to avoid becoming financially tethered to Beijing.”

President Xi launched the project to build infrastructure to connect China with East Asia, Africa and Europe in September 2013. The initiative has since been a vehicle for the world’s second largest economy to shift some of its excess manufacturing capacity in steel, cement and other building materials to developing economies. This has also helped to offset the slowing of its own domestic economy, with investment in and financing for the projects dominated by state-owned enterprises (SOEs).


Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed. Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area” For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number” Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell yo

RWR Advisory: Belt and Road at a Glance

This edition covers developments from March 12 - March 26..  Belt and Road at a Glance   Subscribe to the Belt and Road Monitor Top Developments China National Machinery Industry Corporation, commonly known as Sinomach, has agreed to  build  a $845 million, 255-mile railway across  Iran , building upon a sustained period of growth for Chinese investment in Iran that accelerated after Xi Jinping’s state visit to the country in January 2016. The railway will link the cities of Tehran, Hamedan and Sanandaj. China Civil Engineering Construction, a subsidiary of CRCC, is currently also  building  a 263-km railway line from Kermanshah to Khosravi. According to Chinese entrepreneur Lin Zuoru, who  owns  factories in Iran, “Iran is at the center of everything.”On March 23, China’s Ministry of Commerce announced that foreign direct investment by Chinese companies in 50 Belt and Road countries fell by 30.9% year-on-year. While the Ministry stated that this number covers investment across al

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میں Please help the deserving persons... Salary: Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows; Welder: Rs. 1,700 daily Heavy Duty Driver: Rs. 1,700 daily Mason: Rs. 1,500 daily Helper: Rs. 850 daily Electrician: Rs. 1,700 daily Surveyor: Rs. 2,500 daily Security Guard: Rs. 1,600 daily Bulldozer operator: Rs. 2,200 daily Concrete mixer machine operator: Rs. 2,000 daily Roller operator: Rs. 2,000 daily Steel fixer: Rs. 2,200 daily Iron Shuttering fixer: Rs. 1,800 daily Account clerk: Rs. 2,200 daily Carpenter: Rs. 1,700 daily Light duty driver: Rs. 1,700 daily Labour: Rs. 900 daily Para Engine mechanic: Rs. 1,700 daily Pipe fitter: Rs. 1,700 daily Storekeeper: Rs. 1,700 daily Office boy: Rs. 1,200 daily Excavator operator: Rs. 2,200 daily Shovel operator: Rs. 2,200 daily Computer operator: Rs. 2,200 daily Security Supervisor: Rs.