In the first decade of the initiative, Beijing granted loans worth the equivalent of almost a trillion euros for the construction of bridges, ports and highways, according to a report published on Monday by the US research institute AidData.
More than half of the loans have already entered the repayment phase. “The total outstanding debt – including capital but excluding interest – of borrowers in developing countries to China is at least $1.1 trillion,” said the report from the Virginia-based institute.
Loans totaling around $80 billion flow to low- and middle-income countries every year. In comparison, the USA only grants loans worth $60 billion annually to similarly financially weak countries. “Beijing finds itself in an unfamiliar and uncomfortable role – as the world’s largest official debt collector,” write AidData researchers.
Proponents of the New Silk Road repeatedly emphasize that the project will ensure economic growth in the Global South. However, critics complain about the opaque pricing of numerous infrastructure projects by Chinese companies. Countries such as Malaysia and Myanmar have already tried to renegotiate contracts to reduce costs. The project is also repeatedly criticized because of the enormous CO2 emissions and the damage to the environment.
The New Silk Road dates back to China’s President Xi Jinping and has led to the construction of ports, railways, airports and industrial parks in Asia, Europe, Africa and beyond. These projects are intended to give China better access to other countries’ markets.