Bumpy ride for Belt and Road

China | Associated Press 29 Aug 2018

Chinese officials have defended Beijing's One Belt, One Road initiative against complaints it leaves host countries with too much debt after Malaysia canceled two high-profile projects.

The officials said President Xi Jinping's signature foreign policy initiative is creating assets that are needed by developing countries but might take time to pay off.

The deputy chairman of the cabinet planning agency, Ning Jizhe, rejected what he said were foreign news reports that blamed the initiative for debt problems.

"People's livelihoods and economic development have been boosted," Ning told reporters. "No debt trap has been created."

The One Belt, One Road initiative is a business venture, not aid, Chinese officials say, but governments including the United States, Japan and India worry Beijing is trying to build a China-centered structure that will erode their influence.

Some Chinese-led projects have run into complaints that they are too costly and give too little work to local contractors. Some governments including Thailand, Tanzania, Sri Lanka and Nepal have scrapped, scaled back or renegotiated projects.

This month, Malaysian Prime Minister Mahathir Mohamad canceled projects including a US$20 billion (HK$156 billion) railway he said his country cannot afford. Last December, Sri Lanka sold control of its port of Hambantota to a Chinese state-owned company after falling behind in repaying US$1.5 billion in loans from Beijing.

Chinese authorities choose projects "very carefully" and examine host country finances to make sure they can repay loans, said a deputy commerce minister, Qian Keming. However, he said they would welcome the participation of developed countries and international organizations.

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