The coronavirus pandemic
has dealt a body blow to China's landmark initiative for global influence
domination -- the Belt and Road initiative (BRI) with most of the 142 recipient
nations now seeking to renegotiate the deal. Chinese policy advisers and
bankers told the Financial Times that Beijing was considering a number of
responses, including the suspension of interest payments on loans from the
country's financial institutions. But they also warned against expectations
that China will forgive debts outright.
"We understand a lot
of countries are looking to renegotiate loan terms," said a researcher at
the China Development Bank, a Chinese 'policy bank' that -- along with the
Export-Import Bank of China -- spearheads hundreds of billions of dollars in
lending to BRI projects around the world.
"But it takes time to
strike a new deal and we cannot even travel abroad right now. The BRI loans are
not foreign aid. We need to at least recoup principal and a moderate interest.
It is okay for 20 per cent of our portfolio projects to have problems,"
the researcher said on conditions of anonymity.
"But we cannot
tolerate half of them going under. We might consider extending loans and giving
interest relief. But in general, our loans are issued according to market
principles," he was quoted by the Financial Times further.
The BRI, which was launched
in 2013 as the signature foreign policy initiative of Chinese President Xi
Jinping, is aimed at building infrastructure and boosting Beijing's influence
around the world.
Most of the countries that
have officially signed up to the project are developing countries, with the
weakest credit ratings in the world.Several nations that have applied to
Beijing for debt relief are understood to be in Africa, where the Chinese
government, banks and contractors have lent USD 143 billion between 2000 and
2017, according to the Johns Hopkins School of Advanced International Studies.
-- PTI