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China’s Xi promotes building initiative amid debt worries

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Via AP Business

BEIJING (AP) — President Xi Jinping has promised to set high standards for China’s Belt and Road infrastructure-building initiative, seeking to dispel complaints the many billion dollars in projects leave developing countries with too much debt.

Xi avoided mentioning debt complaints in a speech opening a forum attended by leaders from some three dozen countries to celebrate his signature foreign initiative. But he said Beijing wants “open, green and clean cooperation” with “zero tolerance for corruption.”

Developing countries welcome the initiative to expand trade by building roads, ports and other facilities across Asia and Africa to Europe. But high costs have prompted complaints some are falling into a “debt trap.”

The United States, Russia, Japan and India also worry Beijing is trying to build a trade and political network centered on China and expand its strategic influence at their expense.

Xi’s government is trying to revive the initiative’s momentum after the number of new projects plunged last year. That came after Chinese officials said state-owned banks would step up scrutiny of borrowers and some governments complained projects do too little for their economies and might give Beijing too much political sway.

Countries including Malaysia and Thailand have canceled or scaled back projects while Ethiopia and others have renegotiated debt repayment.

Xi noted China’s finance ministry on Thursday issued guidelines for assessing debt risks for borrowers. The ministry said those “debt sustainability guidelines” are based on the standards of the International Monetary Fund and other international institutions.

The president tried to ally complaints about lack of economic benefits and political influence, saying Belt and Road is “not an exclusive club” and promotes “common development and prosperity.”

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“We need to pursue open, green and clean cooperation,” Xi said. “Everything should be done in a transparent way and we should have zero tolerance for corruption.”

His audience at a Beijing conference center included Prime Ministers Aung San Suu Kyi of Myanmar, Lee Hsien-Loong of Singapore and Adiy Ahmed of Ethiopia and leaders or envoys from Greece, Serbia and Malaysia.

Xi said Beijing also wants to expand the scope of its initiative by encouraging cooperation among Belt and Road countries on health, water resources, agriculture and science and technology. He promised to fund scholarships for students from Belt and Road countries.

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