China defends Belt and Road Initiative

In a nod to concerns over loans, Finance Minister Liu says China will release a framework to ‘prevent debt risks’

BEIJING • China launched yesterday a staunch defence of its Belt and Road global infrastructure project as it opened a summit with a pledge to ease concerns about debt linked to its signature foreign policy.

President Xi Jinping’s pet project is a reboot of the ancient Silk Road to connect Asia to Europe and Africa through massive investments in maritime, road and rail projects.

The initiative offers to bring much-needed modern infrastructure to developing countries, but the US has dubbed it a “vanity project” and critics warn it is a “debt trap” favouring Chinese companies.

Huang Kunming, a member of China’s powerful Politburo, said at the opening of the three-day Belt and Road Forum in Beijing that there have been “some misunderstandings and unfounded rumours” about Belt and Road Initiative (BRI) that they hope to clear up.

But in a nod to the concerns over loans, Finance Minister Liu Kun said China would release a framework to “prevent debt risks”, according to state-owned China Securities Journal.

The “debt sustainability analysis framework” encourages Chinese financial institutions and BRI countries to voluntarily improve debt management levels, the report said.

China must properly address “issues of environmental protection and debt management that the international community pays close attention to”, said Zheng Zhijie, governor of the China Development Bank.

The state policy bank has doled out much of the Belt and Road-related loans since 2013, with Zheng saying it had extended US$190 billion (RM786.22 billion) in financing to 600 projects.

International Monetary Fund chief Christine Lagarde said Liu’s announcement and China’s increased focus on the long-term success of BRI projects are “very welcome steps in the right direction”.

Lagarde told the forum that “sound financial regulation, transparent rules for investment and attention to fiscal sustainability” are needed to successfully open capital markets, according to her prepared remarks.

Leaders from 37 countries have begun to arrive in Beijing for the three-day forum, with officials from scores of other nations in attendance.

Russian President Vladimir Putin and Italian Prime Minister Giuseppe Conte, whose country became the first Group of Seven member to sign up to Belt and Road, are among the headliners. — AFP