President Xi Jinping launched the Belt and Road Initiative in 2013, immediately winning over many foreign governments with promises of unprecedented investment.
China’s funding promises under its contentious Belt and Road Initiative are falling short by close to $80 billion in South-East Asia alone, according to a new report, as megaprojects languish or fail entirely amid the global clean energy transition, poor planning and host country instability.
While there had been a steep decline in new agreements, China was shifting its investment towards smaller projects while lifting its focus on risk management, compliance, safety and environmental standards. “These projects respond to real and immediate needs in the region,” the authors wrote. “But there is a significant gap between China’s promises and its implementation, between what it commits to and what it delivers.“This gap amounts to more than $US50 billion in unfulfilled project financing with more than half allocated to projects that have been cancelled, downsized, or otherwise seem unlikely to proceed.
The Lowy Institute report cited Malaysia’s East Coast Rail Link, originally slated to cost $US12 billion, as one of the most expensive examples of a Belt and Road debacle. “Current Prime Minister Anwar Ibrahim will continue the project, albeit with a substantial haircut,” the report said. “It was reported in 2022 to be costing the Malaysian government about $US16 billion.”
“Other factors appear to have been far more instrumental in China’s low project implementation rate in South-East Asia,” the authors said. “These factors include the nature and scale of the projects, political instability, local stakeholder engagement, and the global energy transition.”
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