Asia Minute: China Hosting Belt and Road Initiative Forum
Infrastructure spending is an issue before both the state legislature and the U.S. congress. It’s also the topic of an international gathering next week in China.
There is no infrastructure project in the world quite like China’s Belt and Road Initiative. It’s actually a series of projects built around the idea of a modern “silk road” connecting China to Asia, Europe and beyond. From power plants in Pakistan to high speed trains in Indonesia and port facilities in Sri Lanka, the Belt and Road Initiative is designed to boost Chinese trade, investment and influence.
Morgan Stanley estimates spending will top 1.3 trillion dollars within the next eight years.
According to Bloomberg, the series of projects that started several years ago has already cost more than the Marshall Plan that rebuilt Europe after the second world war.
Next week in Beijing, the Chinese government is hosting a Belt and Road Initiative forum with representatives from more than a hundred countries.
There is a definite political angle to all this spending. Critics say some countries risk becoming financially dependent on China — there is a loan component to many of the construction projects.
This week, China’s official Xinhua news agency said about warnings of a potential “debt trap” – “such noises are ill-founded.”
The World Bank says the projects already involve 30% of the world’s GDP, and 75% of its known energy reserves.