China’s BRI is facing resistance in region, says ministry report

NEW DELHI: The Belt and Road Initiative (BRI), a connectivity project linked to Chinese president Xi Jinping, is facing a “push back”, especially in India’s immediate neighbourhood, according to a study by the Union ministry of external affairs (MEA), at a time when Beijing is getting ready to hold the 2nd Belt and Road forum meeting this April.

Launched five years ago, BRI is spread over 80 countries across Asia, Europe, Africa, South America, and the Arctic, with an apparent aim to re-energise trade through investments in ports and power plants. The project, billed at about $900 billion, will enhance China’s influence and is seen as a key to its global ambitions.

India has refused to participate in BRI citing sovereignty issues because the China-Pakistan Economic Corridor (CPEC) passes through Pakistan Occupied Kashmir (PoK).

The MEA study, seen by HT, says that “unacceptable conditions” imposed on countries is leading to a severe push back. BRI was as much about China getting a foothold across the

world, projecting itself globally, as it was shovelling excess Chinese capacity, said a senior official familiar with the matter who asked not to be named.

“We are expecting that there will be a major tweaking of policy in the April BRI meeting,” he added.

The first BRI meeting was held in May 2017.

The study points out that Pakistan withdrew the Diamer-Bhasha dam project because “unacceptable conditions of ownership and finance [were] imposed by China”. The BRI projects in Pakistan alone cost $62 billion. “The Pakistani leadership is split” and “differences are manifesting” in several forums, including senate committee hearings, the study says, adding that additional burden on Pakistan because of the BRI amounting to $3.5 billion is “causing concern”.

Citing another example, the study talks about the Western Seti Hydropower project in Nepal. Kathmandu was asked for a guarantee of 17% of the cost besides a sovereign guarantee since Beijing “was not satisfied with the Nepal investment board”, the study says, leading to the hydropower project being cancelled by the KP Oli government. The Three Gorges Corporation, which in 2012 undertook the execution of the project, told the Nepalese authorities in 2018 that the 750MW project was proving to be financially unfeasible because of the steep resettlement and rehabilitation costs.

The study says that projects in Bangladesh are facing serious opposition as well. It cites the blacklisting of the China Harbour Engineering Company for offering bribes to government officials in Bangladesh. “The company was hired to expand the Dhaka-Sylhet highway,” the study notes, and adds, “the cost, especially of road contracts quoted by the Chinese are 5-10 times the cost in China and more than 10-15 times that in India. This along with wider conditions imposed by China is causing concern in Bangladesh.”

In Myanmar, too, BRI projects are being opposed vigorously, the study says. The Kyaukphyu Kunming gas pipeline is facing serious opposition, the study says, because of “insensitivity to locals” through “irresponsible restrictions on the movement of people and waste disposal practices”.

The MEA study notes that there is “increased uneasiness in Central Asia, in particular Kazakhstan, Kyrgyzstan” — two countries crucial to the success of BRI.

Experts say that is was not a surprise. “Will China provide more and more loans to tide over already cashed-strapped countries that are unable to repay the debts? Earlier, it was believed that the BRI projects will make money, but many have turned out to be financially unviable. Importantly, since most of these countries do not export much to China, the option of paying back loans is difficult,” Dr Sujit Dutta, senior VIF fellow and former professor at the Nelson Mandela Centre for Peace and Conflict Resolution, Jamia Millia Islamia university, said.

“China has, in fact, taken over the management and running of some of the major projects like the Gwadar Port in Pakistan and the Hambantota Port in Sri Lanka. In several countries, debt and tied aid are leading to serious questioning of the terms of various projects and cut backs. Malaysia, Sri Lanka, Myanmar, and the Maldives, among others, have witnessed such responses,” he added.