10 years after the Belt and Road: unfulfilled promises, large-scale corruption and only one winner

Xi Jinping launched the New Silk Road ten years ago (Illustrative Image Infobae)

Agustín Barletti He is one of the greatest scholars of the expansion of China Worldwide. He knows like few others the true intentions of the Beijing regime to fix what he calls “a new world order”, led by his main partner, the Russia of Vladimir Putin. It is also aware of its increasingly marked influence in developing countries that resort to Xi Jinping as an alternative means of financing, falling into what is known as “the chinese trap”.

The author of “Dragon’s Hunger”, the successful book that presents “China’s plan to eat the world”, spoke about the ten years since the launch of the New Silk Road driven Xi. It is the main and most ambitious plan of the Chinese Communist Party (PCC) to subjugate – by dint of pharaonic projects – third world countries and leave them committed to unpayable debts. Ports, bases, routes, highways, nuclear power plants… anything goes in the colonizing project of China. AND Barletti He tells it in his book and in this talk with Infobae.

– It is 10 years since one of Xi Jinping’s most ambitious projects, the Silk Road Initiative. What balance does it make?

– For years, China has been financing various infrastructure projects, mainly in developing countries with restricted access to international credit. In return, it obtains preferential clauses that benefit its companies, all of them from the State and subject to the mandate of the Chinese Communist Party. It also gains privileged access to local markets and resources, such as raw materials and energy, including oil and gas pipelines and other collaborations in the regions. The maneuver began in Africa, continued in Latin America, and was later extended to several countries in Europe and Asia as a result of the 2007 economic crisis.

A turning point occurred, however, in 2013, when Xi Jinping proposed connecting 65% of the population and a third of the world’s GDP with China through the creation of a network of sea routes and land links. A decade after this decision, what we see are unfulfilled promises, many more benefits for China than for the member countries, and large-scale corruption due to the flood of millions given openly and without control.

– What was Xi Jinping’s main objective with these mega projects?

– In theory, Xi tried to shift the geostrategic axis of the planet by putting China at the center of the world. Seen from China, the era during which European powers dominated the world was nothing more than a brief parenthesis before history returned to its normal course, namely Chinese centrality. This vision that prevails in China constitutes a solid cultural basis for the development of its expansionist policy, in the image and likeness of the Eurocentric vision for the conquering imperialisms of two centuries ago. It is about projecting Chinese civilization as European civilization once did. For Xi Jinping, the 21st century will be the Chinese century, although current reality would refute this.

– Many analysts talk about “failure.” Because?

The COVID crisis, the Russian invasion of Ukraine, tensions with the United States and, above all, the economic crisis in China, have put this emblematic project promoted by Beijing in check. And the paradox is that the way in which China approached the Silk Road is one of the causes of the financial difficulties that today undermine the foundations of the Asian giant. This is because this undertaking is based on granting member countries one emergency loan after another, without asking its borrowers to restore the discipline of their economic policies. We must not forget that China never considers the repayment capacity of the country to which it lends, an essential requirement for multilateral organizations such as the IMF. In fact, 60% of the countries that are part of this initiative have a “junk” international credit rating or no rating at all.

The situation worsens even more when it is observed that Beijing, under the excuse of not interfering in the sovereign decisions of other countries, never monitors the investments it makes. Millionaire disbursements without question were undermining this project to the point of creating the conditions conducive to its failure in the near future.

According to the analysis company Rhodium Group, in 2020 and 2021 alone, Chinese banks had to refinance nearly USD 52 billion of agreed loans. But since the threat of default loomed after the renegotiation, it began to systematically grant new bailout loans. Until the end of 2021, Beijing would have agreed to such loans for a total value of USD 240 billion to preserve the liquidity of debtors and protect its own banking system.

– If you had to take stock, what is the situation of the countries that joined? Better or worse?

To date, the conclusion that can be drawn is that the money disbursed by the People’s Republic along the Belt and Road mostly brought corruption. According to a McKinsey survey, between 60% and 80% of Chinese companies in Africa paid bribes. In recent years, Chinese telecommunications companies Huawei and ZTE have been accused of corruption in at least 15 African nations. In 2017, Patrick Ho, a representative of the state-owned CEFC China Energy Company, was detained by US officials for paying bribes to politicians in Chad and Uganda. The bribes had been paid to benefit the state-owned China National Petroleum Corporation. According to the TRACE Bribery Risk Matrix, many BRI countries are among the highest risk of bribery. Among the countries with the worst records of accepting bribery are prominent BRI members such as Cambodia, Turkmenistan, Equatorial Guinea, Yemen, South Sudan, Somalia, Venezuela and Laos, among others. This “free money” from the BRI and bribes make it almost impossible for North American companies to get contracts in the countries that are part of the initiative. In fact, 89% of the contracts awarded in BRI projects go to Chinese companies.

– Italy’s announcement to get off the Route caused even more noise than its accession. What do you attribute it to?

The position of Giorgia Meloni, Italy’s far-right prime minister, on China is no secret. Shortly before the elections that propelled her to lead a right-wing coalition, Meloni called Rome’s entry in 2019 into the New Silk Road Initiative a “big mistake.” However, and beyond political convictions, the truth is that the agreement managed to triple Chinese exports to Italy, but it did not have the same effect in the opposite direction. China also did not comply with the infrastructure works schedule or with the committed investments.

– Do you think that more countries will follow Italy in its decision?

I have no doubt there will be multiple defections in the future. Without going any further, we have the case of Argentina. In February 2022, President Alberto Fernández approved the incorporation of Argentina into the Belt and Road, but everything will be subject to the result of the next elections. If Javier Milei triumphs, for example, a process similar to the Italian one would be followed.

– How do you think the current economic numbers shown by China influence the evolution of the Route projects?

In 2022 China reported that its economy grew 3%. If we except the 2020 figure, the year in which its growth was reduced to 2.2% due to the initial impact of the pandemic, the 2022 figure is the poorest since the late 1970s. In March 2022, Beijing put The objective was for GDP to climb around 5.5% year-on-year, which would have already been the slowest pace of progress in decades but which analysts described as ambitious given the context. By 2023, the goal is to achieve 5% growth, something unlikely based on what is being seen. Even if it achieved this, it would be far from the 12% registered in 2007. It is not in vain that investors are hesitant when it comes to financing Beijing. Banks such as Goldman Sachs, JP Morgan and UBS, which had predicted a record year for China, have since revised their forecasts downwards and are now questioning the value of investing in the country. If we add to this the real estate and financial crisis, declining foreign trade, and the high unemployment rates suffered by China, it is clear that the regime will have to postpone or even postpone its political, diplomatic and economic ambitions in the coming years.

– Will this initiative last another ten years?

In a normal country, with republican institutions, alternation in power, freedom of expression and Independent Judiciary, this initiative would have been abandoned years ago. But since it is an autocratic regime, its duration will depend on the epic story proposed by the handful of members of the Chinese Communist Party in the shadow of Xi Jinping.

X: TotiPI