Over the last decade, the Chinese Communist Party (CCP) has strategically relied on the Belt and Road Initiative (BRI) for at least $ 4 trillion to enhance its image and influence. 149 countries to date. But success has missed that effort, and as a result the BRI strategy may be destined.
For example, consider a CCP’s deadlocked attempt to promote a BRI strategy in European countries. Barriers and delays created by the sanctions imposed on Russia for the invasion of Ukraine were not expected.
Prior to sanctions, China used Russia as a convenient transit point for transporting Belt and Road equipment and supplies to Europe. China sent the freight to St. Petersburg, Russia, via the China-Europe Railroad, and transported it across the Baltic Sea to Central Europe. Sanctions have forced China to detour cargo around Russia and enter Europe via slower land routes that cross Belarus, Poland and other countries.
China’s BRI strategy was first introduced in 2013 by Chinese Communist Party leader Xi Jinping. The strategy is divided into two parts. Land via the Silk Road Economic Belt through Central Asia, Central and Eastern Europe to Western Europe. It is then on the water via the Maritime Silk Road, which runs west through the South China Sea and the Indian Ocean, through Southeast Asia to South Asia, the Middle East, Africa and Europe.
The war-torn Ukraine at the confluence of the Eurasian continent is an important gateway from Asia to Europe and an important source of energy, food and military technology for China.
Other countries along the BRI delivery route, such as Belarus, Poland and Romania, are also feeling the tension caused by the Russian-Ukraine war.Belarus, for example, has been influenced in several ways Collateral sanctions Against the decision to support Russia.
BRI’s Russian dilemma
Railroads from China to Europe are an important channel for land freight transportation. It is the only and most important carrier of BRI’s land economic belt, with routes crossing Kazakhstan, Russia, Belarus, Poland and Europe from west to east.
upon March 31China’s Economic Daily explained how sanctions on Russia and Belarus forced trains to detour not only Ukraine but these countries as well. As a result, shipments to Europe have been delayed and trains returning to China have been delayed. Often empty.. It is unknown how long this confusion will last.
Participating BRI companies in China say that freight and transportation delays are not the only problems they are facing. In addition, sanctions and the consequent turmoil have created logistics difficulties, rising labor costs and difficulty in concluding trade agreements, as Russian banks are no longer part of the global financial system pedigree SWIFT. ..
According to US commentator Tuo Wei, the positive impression that BRI wanted to make in Europe was smeared on the world stage through collaboration between China and Russia. This black eye contributes to making the BRI strategy vulnerable to failure in Europe and elsewhere.
In an interview with The Epoch Times, Wei speculated that Ukraine would resist becoming a post-war BRI pawn, as did Lithuania, with the apparent support of the CCP for Russia.
“Other European countries, including Germany, the Czech Republic, Hungary, Poland, Bulgaria and Romania, may also reconsider their cooperation with the CCP and be wary of its invasion,” Wei said.
BRI leads to debt and riots
Meanwhile, in Sri Lanka, the main hub of BRI’s maritime routes, citizens are protesting for the worst economy since 1948. This small island nation relies on trade between Russia and Ukraine for tourism and the tea industry. However, the war between these countries has contributed to the failure of Sri Lanka’s economy, and the country’s economic crisis has turned into a political crisis.
However, Sri Lanka’s economic failure did not begin with Russia’s invasion of Ukraine. It began when the CCP used its BRI strategy directly to put Sri Lanka into a debt trap, which has since become a political nightmare.
According to World Bank data, Sri Lanka has a total debt of $ 35 billion, of which $ 6 billion owes to China to finance BRI projects managed by Chinese companies. These projects include infrastructure such as ports, airports and railroads.Sri Lanka agreed to contain debt with China 2017 Lease the desirable Hambantota Harbor in the Indian Ocean to China for 99 years at a price of $ 1.1 billion. The lease was extended for another 99 years in 2021.
Sri Lanka is obliged to repay this year $ 6.9 billion Of its external debt. However, this is unlikely, as the total foreign exchange reserves are only $ 2.3 billion. To deal with this deficit, Sri Lanka requested the CCP to restructure its debt last January. However, CCP does not yet support it.
The Sri Lankan government declares a state of emergency to quell intensifying mass protests April 1st.. This included shutting down all internet communications and imposing a curfew on the citizens of the capital.
On the night of April 3, all 26 members of the Sri Lankan government’s cabinet, except the Prime Minister, resigned. The new cabinet took office less than a day before the Minister of Finance resigned on April 7. Then, on April 11, Colombo protesters gathered outside President Gotabaya Rajapaksa’s office and demanded that he also resign.
Other BRI troubles
Indonesia has become the first country to participate in the CCP’s water-based “Maritime Silk Road” initiative. Although Indonesia remains neutral in its partnerships with other countries, it feels pressured to respond to the growing influence of CCPs in Southeast Asia and its expansion in the South China Sea.
according to Survey twice a year Released to April 5th Indonesians are wary of Chinese investment, according to the Lowi Institute in Australia. Almost half of the respondents felt that the Chinese Communist Party administration would be the most threatening country within the next decade. 60% of Indonesians supported working with other countries to contain the influence of CCP.
Indonesians have good reason to doubt the Chinese Communist Party. Investing in BRI High speed rail project From Jakarta to Bandung, it has not produced the desired results. During construction by a Chinese state-owned enterprise, this initial enthusiasm for the 142-kilometer high-speed rail was extinguished by long delays of over $ 2.47 billion and cost overruns.
The initial cost estimate for the CCP for this BRI project was $ 5.5 billion at the break-even point in 2014. The revised estimate suggests that the project will cost $ 7.79 billion with a break-even point in 40 years. Based on this data, it is no exaggeration to say that the BRI strategy does not enhance the image and influence of CCP in Indonesia.
according to February According to a Nikkei Asia report, China spends more than $ 7 billion on Indonesia’s railroad lines and is still investing in ventures. If this project is canceled, China could lose more money than Indonesia. However, issues with CCP’s BRI strategy are evident elsewhere.
Kazakhstan is a major overland hub for BRI and is an important source of energy as all three gas pipelines in Central Asia in China pass through the country.
Since January, gas prices in Kazakhstan have soared to affordable prices, putting the country in social unrest.There was also dissatisfaction among the people Fueled by Wheat and flour price increases caused by drought and the suspension of grain imports from Russia.
National protests have caused havoc in Kazakhstan’s fragile economy and financial markets.Inflation rates in the country are rising rapidly, central banks set benchmark interest rates 9.75%And the Tenge currency continues to fall rapidly.
As of February 28, Tenge’s exchange rate against the US dollar had fallen to 496: 1, a significant drop from the 433: 1 reported during the January 7 turmoil.As a result, Kazakhstan’s financial supervisory authorities suspend Tenge’s trading and bank exchange services will stop offering price quotes.
Kazakhstan may benefit from the BRI project, but it is unlikely to succeed. Not because of Kazakhstan’s financial difficulties, but because China has already established a disadvantageous reputation in Kazakhstan.Chinese oil and mining companies operating in this region Exposed He was accused of bribing local civil servants, accusing them of polluting the environment, and causing land conflicts with the people of Kazakhstan.
Ellen Wan contributed to this article.
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Jennifer Bateman is a news writer focused on China.