China‘s Belt and Road Initiative (BRI) will focus on transparency and clean governance, President Xi Jinping said at the opening of a summit on his grand plan on Friday, adding that the massive infrastructure and trade plan should result in “high-quality” growth for everyone.
Xi’s plan to rebuild the ancient Silk Road to connect China with Asia, Europe and beyond has become mired in controversy as some partner nations have bemoaned the high cost of infrastructure projects.
China has not said exactly how much money will be needed in total, but some independent estimates suggest it will run into several trillion dollars.
Beijing has repeatedly said it is not seeking to trap anyone with debt and only has good intentions, and
has been looking to use this week’s three-day summit in Beijing to recalibrate the policy and address those concerns.
“Everything should be done in a transparent way and we should have zero tolerance for corruption,” Xi said in a keynote speech.
“Building high-quality, sustainable, risk-resistant, reasonably priced, and inclusive infrastructure will help countries to fully utilise their resource endowments.”
Unlike the first summit in 2017, where Xi said Chinese banks would lend 380 billion yuan ($56.43bn) to support Belt and Road cooperation, he did not give a figure for new financing support. But Xi is expected to give another speech on Saturday.
‘Debt trap diplomacy’
Al Jazeera’s Katrina Yu, reporting from Beijing, said President Xi used most of his half-hour speech trying to allay concerns about the BRI.
“One of the main criticisms is that this really is a big plan, which basically is a form of debt trap diplomacy – what happens is some of these countries … are saddled with millions, potentially billions of dollars worth of debt that they’re unable to pay back,” Katrina said.
“They default on these loans, which leaves them quite vulnerable to Chinese political influence,” she added.
International Monetary Fund Managing Director Christine Lagarde echoed those concerns.
“History has taught us that, if not managed carefully, infrastructure investments can lead to a problematic increase in debt,” Lagarde said in remarks prepared for delivery at the conference.
“I have said before that, to be fully successful, the Belt and Road should only go where it is needed. I would add today that it should only go where it is sustainable, in all aspects.”
Sri Lanka sold China a 70 percent stake in a major port – Hambantota – in 2017 despite security concerns and demonstrations. Sri Lankan officials said the deal was the only way the country could repay debt – much of it owed to China.
“I am fully in support of the Belt and Road Initiative,” Malaysian Prime Minister Mahathir Mohamad said at the forum. “I am sure my country, Malaysia, will benefit from the project.”
Pakistan’s Prime Minister Imran Khan said his country’s electricity supplies had increased “massively” with the implementation of the China-Pakistan Economic Corridor (CPEC).
China has pledged more than $60bn to Pakistan in loans and investments for roads, ports, power plants and industrial parks making the country one of the largest BRI recipients.
Khan said Pakistan was looking forward to the project moving into its next phase focusing on “social uplift”, poverty alleviation, agriculture and industry, including the opening of special economic zones.
“In a world of uncertainty”, Khan said, the initiative offered “a model of collaboration, partnership, connectivity and shared prosperity”.
United Nations Secretary-General Antonio Guterres said the environment could also benefit.
The scale of planned Belt and Road investments “offers a meaningful opportunity to contribute to the creation of a more equitable, prosperous world for all, and to reversing the negative impact of climate change”, Guterres said.
Xi launched the BRI in 2013, and according to financial markets data company Refinitiv, the total value of projects in the scheme stands at $3.67 trillion, spanning countries in Asia, Europe, Africa, Oceania and South America.
The BRI will also bring development opportunities for China as it further opens its markets to the world, Xi said.
“In accordance with the need for further opening up, [we’ll] improve laws and regulations, regulate government behaviour at all levels in administrative licensing, market supervision and other areas, and clean up and abolish unreasonable regulations, subsidies and practices that impede fair competition and distort the market,” he said.
Xi promised to significantly shorten the negative list that restricts foreign investments, and allow foreign companies to take a majority stake or set up wholly-owned companies in more sectors.
Tariffs will be lower and non-tariff barriers will be eliminated, Xi added.
China also aims to import more services and goods, and is willing to import competitive agricultural products and services to achieve trade balance “and inclusive growth for the world economy”, Xi said.
But despite the promises, there are other criticisms over how some of these deals are actually implemented, Al Jazeera’s Katrina said.
“There is very little rule of law involved … very opaque deals resulting in corruption, in environmental damage,” she said.
Although the summit brought together 37 heads of state, the United States had no significant representation, nor did most major European countries, Katrina noted.
“They remain deeply suspicious and sceptical of this plan being anything more than Beijing trying to attain more political influence worldwide,” she said.
Russian President Vladimir Putin said BRI “will provide a harmonious and sustainable economic development, economic growth, throughout the Eurasian space”.
Giuseppe Conte, the prime minister of Italy, which recently became the first G7 country to sign on to the initiative, is also attending the summit.