China is revamping its global Belt and Road Initiative
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In the decade since China launched its Belt and Road Initiative, it's made about $1 trillion in loans to build infrastructure throughout the developing world. The BRI has helped Beijing build influence, but there have also been a lot of bad investments, so China is revamping its approach. NPR's Emily Feng reports.
EMILY FENG, BYLINE: From debt trap diplomacy to allegations of pollution, China's BRI has never been short of controversy.
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UNIDENTIFIED PERSON: The lending from China stood at 1% in 2001.
FENG: But Beijing's decadelong global infrastructure push was initially not as successful as some thought it would be, says Brad Parks, executive director of the AidData research project at William and Mary University in Virginia.
BRAD PARKS: So if you're sitting in Beijing right now and you're looking at a global dashboard of your overseas project portfolio, what would you see? You would see a lot of flashing red lights.
FENG: In fact, Parks says many of the early projects China invested in have flopped.
PARKS: If you fast forward to today, they have nearly 1,700 problem projects worth more than $450 billion with a B.
FENG: And so behind closed doors, China's President Xi Jinping and his officials are quietly reworking the BRI, he says. This includes using more experienced Western banks to finance projects. It's tightened auditing, eliminating environmental, social and governance risks in its new projects without sacrificing speed.
PARKS: Beijing is figuring out how to give leaders in the developing world exactly what they want, which is rapid delivery of big-ticket infrastructure projects without unreasonably high levels of risk.
FENG: Another reason why China is under pressure to improve its BRI is its economy is struggling, and Chinese political pressure means tighter regulation that's reined in BRI funding. Here's Yunnan Chen, a researcher who studies Chinese investment at ODI, a London-based think tank.
YUNNAN CHEN: Regulatory pressure ramps up massively after 2016. There's audits launched into multiple policy banks and commercial banks, so there's a lot going on at home.
FENG: All this presents an opportunity to China's geopolitical rivals such as the U.S. Washington, for example, is now leading the funding of a new railroad in Africa. But Chen says given the mistakes China has made over the years there in Africa, the U.S. should also study where China went wrong in order to compete.
Emily Feng, NPR News. Transcript provided by NPR, Copyright NPR.
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