In this episode of the ChinaPower Podcast, Dr. Agatha Kratz joins us to discuss how the Covid-19 pandemic has affected China’s Belt and Road Initiative (BRI). Dr. Kratz provides background on the history and past successes of the BRI from 2013-2020. She argues that, prior to the pandemic, China’s BRI was at a low point. There were fewer contracts and increased scrutiny on past unsustainable projects and loans. Dr. Kratz contends that those pre-existing trends were further accentuated by the Covid-19 travel restrictions, deteriorated financial conditions, and disruptions in trade. Lastly, Dr. Kratz identifies the core problem with the BRI to be long-lasting debt – which can lead to debt crises – in recipient countries.
The world economy is shaped not just by states, but also by an assortment of influential companies that act as critical elements of national economic power. In conjunction with China’s emergence as an economic superpower, Chinese companies have climbed the ranks to be among the largest in the world.
Encouraged by Beijing’s “Go Global” strategy, Chinese firms have expanded into foreign markets to acquire resources and assets while spurring domestic innovation. Overseas investment allows China to bolster its own economy and leverage its economic power to expand its influence abroad.
After decades of near double-digit growth, Chinese leaders have turned to using turbo-charged stimulus financing to maintain moderate growth. However, China’s credit expansion has contributed to growing financial vulnerabilities. Learn more about China’s debt concerns with this ChinaPower exclusive.
China’s Belt and Road Initiative aims to enhance the country’s connectivity with the world through developing infrastructure and cultural ties. Economic integration and development under this initiative can further strengthen China’s power in Eurasia and beyond.