Malaysia, Pakistan and Sierra Leone are among a growing list of countries that have delayed or scrapped China-led projects
are drilling their way through the green hills of Laos, clearing a path for a railway that one day may traverse South-East Asia. Each time they complete a tunnel—at least three times in the past month—they hold a brief ceremony, waving Chinese flags for the cameras. They are celebrating not just their engineering success but also the evidence before them that the Belt and Road Initiative , China’s global infrastructure-building scheme, is making progress. The full railway is a long way off.
An oft-cited example of China’s supposedly predatory approach involves Hambantota, a Sri Lankan port which has flopped commercially. In 2017 Sri Lanka handed control of the port to a state-owned Chinese company on a 99-year lease. But Deborah Brautigam of Johns Hopkins University says that of more than 3,000 China-financed projects that she and others have tracked, Hambantota is the only one that is used in support of the debt-trap theory. It is the exception, not the rule.
It is welcome that China is supporting hard-up nations. But its enthusiasm generates foolhardiness. David Dollar of the Brookings Institution in Washington has found that Chinese development lending appears indifferent to political and economic risks. The Centre for Global Development has identified eight countries drowning in red ink that could be further swamped bycountries based on measures such as the quality of their financial regulation and their openness to trade.
Some analysts in China have started to express unease. Economists at the Chinese Academy of Social Sciences, a think-tank, argued in a paper last year that the government must entice other countries to backprojects in order to share the risks. Otherwise, it could be China that finds itself trapped. Conservative estimates are that China will spend $1trn within the next decade on its monumental scheme—about as much as it holds today in American government bonds.
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