Politics and International Relations
After an initial phase of enthusiasm, when it was announced six years ago, the Belt and Road Initiative (BRI) is now entering a new phase, made of circumspection, scepticism, if not open criticism. The handing over of Hambantota port to China on July 28, 2017, for a period of ninety-nine years, was the wake-up call for several Asian countries which feared that China’s “cheque diplomacy” could become a “debt-trap diplomacy” endangering their sovereignty. Elections in 2018, in Malaysia, Pakistan and the Maldives, not to mention previous political change in Sri Lanka and Myanmar, brought to power new governments that are wary of previous BRI agreements with China and concerned with rising debt levels. Pakistan, one of the key countries for the success of BRI, is facing a balance-of-payment crisis caused in part by the import of Chinese capital goods. This is likely to lead to a bailout by the International Monetary Fund, which may demand spending cuts in exchange. This example questions the economic model of the BRI, whereby Chinese banks lend to host countries to finance the construction of infrastructure by Chinese companies with Chinese imported equipment. The profitability of these projects being far from assured, the host countries will struggle to pay back the BRI-induced debt. Our contribution will analyse this new phase of the BRI to see if these issues signal the beginning of the end of the BRI or are just simple vagaries that can be expected for such an ambitious long-term strategy.