News

China's pledges to Southeast Asia come up $50 bn short says study

By AFP

March 27, 2024 05:16 PM


China promised billions of dollars to infrastructure projects across Southeast Asia, but many of these were never built, according to a study by an Australian think tank released Wednesday.

Sydney's Lowy Institute found that since 2015, more than US$50 billion that Beijing promised to projects in the region was unallocated.

More than half the projects were either cancelled, reduced in scale or unlikely to proceed.

Through its Belt and Road Initiative (BRI), Beijing has ploughed billions into Southeast Asia -- and other regions -- in a bid to expand its economic and political power.

Chinese President Xi Jinping has said the landmark initiative promotes global economic growth and pledged to use it to achieve "the modernisation of every country in the world".

But the Lowy Institute's Alexandre Dayant and Grace Stanhope said political instability, poor engagement with local stakeholders, and a declining interest in fossil fuel projects have hampered China's plans in Southeast Asia.

The pair found that China has significantly reduced its investment in Southeast Asia in recent years and moved towards funding smaller projects.

Among the cancelled projects was a 598-kilometre (372-mile) petroleum pipeline in Malaysia, which had its Chinese loan approved in 2017.

Corruption allegations led to that project's demise, the research found.

Still, China remains the largest infrastructure partner in Southeast Asia -- involved in 24 of the region's 34 megaprojects.

Of those 24 projects, there has been a 33 percent completion rate, Lowy found.

Other countries, including Japan and Korea, remain among the top financiers of infrastructure projects but fall short of China's investment.

"There is clear intent at the highest levels in China to maintain a (Belt and Road Initiative) that is long-lasting and responsive to changing circumstances," the researchers said.

While some have warned China is engaged in "debt trap diplomacy" by offering high-interest loans or using projects to gain influence over political elites, Beijing has dismissed those accusations as "smears".

And in many countries, locals have seen clear benefits.

In Cambodia for example, Chinese mega projects include a $2 billion expressway, the country's first between capital Phnom Penh and the seaport town of Sihanoukville.

The Chinese-funded $1.1 billion Siem Reap Angkor International Airport opened last year.

"The projects have helped elevate the economic growth," Vasim Sorya, undersecretary of state and spokesman for the Ministry of Public Works and Transport, told AFP.

"The Phnom Penh-Sihanoukville expressway has greatly helped the national economy" by reducing travelling time, he added.

"Generally, there is no delay in the construction of the projects," he said.

Other Chinese infrastructure projects include a special economic zone, roads, bridges, hydropower plants, hospitals, bridges and a new stadium.

Cambodia has long been a staunch Beijing ally, receiving billions of dollars in soft loans and investments.


AFP


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