Skip to main content

US netas tell Trump to hit China where it hurts: Xi Jinping's flagship Belt & Road plan

A group of US senators on Friday urged the President Donald Trump-led administration to study the impact of the China-funded Belt and Road Initiative on the finances of troubled economies.

Press Trust Of India
Updated On: 

A group of US senators on Friday urged the President Donald Trump-led administration to study the impact of the China-funded Belt and Road Initiative on the finances of troubled economies.

China's massive Belt and Road Initiative (BRI) seeks to build rail, maritime and road links from Asia to Europe and Africa in a revival of the ancient Silk Road trading routes.

"We urge the State Department and the Treasury to consider the impact of the Chinese-financed Belt and Road Initiative on the finances of many troubled economies and policy implications of additional International Monetary Fund (IMF) or World Bank support," the senators wrote in a letter to Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin.

The issues related to BRI, earlier known as One Belt One Road (OBOR), has been a major bone of contention between India and China as one portion of the corridor passes through Pakistan-occupied Kashmir.

"Domestic economic constraints in China stemming from COVID-19 will likely make China less willing to roll over debts as they mature, which could exacerbate emerging-market liquidity challenges. As projects struggle in areas of strategic interest, China will be tempted to safeguard its investments and political influence,' the senators wrote.

Already, the COVID-19 crisis has led BRI recipients like Pakistan, Serbia and Ethiopia to publicly praise China in exchange for much-needed medical assistance as China promotes its 'Health Silk Road' component of BRI, the lawmakers said.

'However, praise will unlikely be enough for debt forgiveness."

The US "must closely monitor" countries now buckling under Chinese-issued debt.

Through US-led institutions like the IMF and the World Bank, the US should support offering debt restructuring to these countries as needed, they said.

Observing that China has expanded its international financing efforts through BRI, particularly with developing countries who require capital for infrastructure in order to be competitive in the 21st century global economy, the senators said that unlike financing through multilateral institutions like the World Bank and the IMF, Chinese lending is inconsistent with global standards of governance.

The BRI loans financed by China's large policy banks like the China Development Bank and the China Export Import Bank typically carry tougher terms, including higher interest rates and shorter payback periods.

Borrowers are often times required to pledge existing assets or resources as collateral and place significant sums in escrow accounts located within China, they said.

This is not surprising, given that BRI loans are only partly made with an eye on economic returns; very often, they are motivated by expectations of political, rather than economic, gain, they wrote.

'Most concerning, consequently, is that the BRI loan agreements, which are frequently crafted with nondisclosure clauses, are withheld from public view,' the Senators wrote.

A 2019 study concluded that 50 per cent of China's loans to developing countries go unreported, meaning these debts do not appear in the 'gold standard' data sources provided by the World Bank, the IMF or credit-rating agencies.

In total, this adds up to more than USD200 billion in hidden Chinese overseas loans, resulting in an incomplete picture on how much countries around the world owe to China and under which conditions.

The same study estimated that around a dozen of the poorest countries owed debts to China equal to 20 per cent or more of their annual GDP, they wrote.

According to senators, recently, some BRI recipients have awakened to the predatory nature of BRI financing.

The price of debt relief could be a permanent forfeiture of sovereign territory, the surrender of strategic assets and natural resources or foreign policy concessions.

For example, in 2017, when Sri Lanka was unable to repay over USD1 billion of Chinese debt for constriction of the Hambantota Port, a Chinese state-owned company took control of the port under a 99-year lease.

Moreover, foreshadowing what's at stake today, it was the last financial crisis in 2008 that helped sow the seeds of the China Ocean Shipping Company's eventual majority stake of Piraeus Port in Greece, the senators wrote


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

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.

A ‘European Silk Road’

publication_icon Philipp Heimberger ,  Mario Holzner and Artem Kochnev wiiw Research Report No. 430, August 2018  43 pages including 10 Tables and 17 Figures FREE DOWNLOAD The German version can be found  here . In this study we argue for a ‘Big Push’ in infrastructure investments in greater Europe. We propose the building of a European Silk Road, which connects the industrial centres in the west with the populous, but less developed regions in the east of the continent and thereby is meant to generate more growth and employment in the short term as well as in the medium and long term. After its completion, the European Silk Road would extend overland around 11,000 kilometres on a northern route from Lisbon to Uralsk on the Russian-Kazakh border and on a southern route from Milan to Volgograd and Baku. Central parts are the route from Lyon to Moscow in the north and from Milan to Constanţa in the south. The southern route would link Central Europe with the Black Sea area and