On Wednesday (18 Oct), China President Xi Jinping announced during the Belt and Road Initiative (BRI), known as One Belt One Road, summit that China would inject another $100 billion as loan for countries in the BRI project via, China Development Bank and Export-Import Bank ($47.9 billion each) plus the Silk Road Fund ($10.93 billion).
China’s grand ambition project has already invested $2 trillion globally in order to make the modern day silk road to avoid its reliance on the two main routes namely Taiwan and Malacca straits that could be easily blocked or possibly hostile in the eyes of Beijing.
However, Chinese development strategy is to give a loan to those BRI countries as most of them couldn’t carry the cost alone and let Chinese state-tied companies construct the infrastructures, which is a hot topic for debate on whether this is a debt policy that will stimulate the Chinese own construction sector or not. Malaysia and Myanmar are a few that need the said injection to continue their solvency.
Meanwhile, some praised the project for providing resources and economic opportunities to those developing and underdeveloped countries.
The construction sector carried China GDP during the aftermath of the 2008 US financial crisis. However, it seems that China couldn’t sustain more domestic construction and might need to export the sector to work outside the mainland as the real estate sector is facing the current crisis.