China’s Lekki Port predicament is proof of BRI’s growing pains
The desire among political and financial leaders in Beijing to climb the value chain in development finance is clear. But the challenges now facing a giant Chinese state-run infrastructure contractor at Nigeria’s new deep-water port in Lekki show that this is easier said than done.
“Will China continue to finance global infrastructure development in the same way it used to?”
It’s a question China public policy expert Hong Zhang asks in a report published on February 14 by Johns Hopkins University’s China-Africa Research Initiative (CARI).
It’s also a question that matters deeply, and not just to Chinese state-owned enterprises (SOEs), banks and policymakers, and the countries – mostly emerging markets in Asia and Africa – most heavily targeted by Belt and Road Initiative (BRI) funding in the Xi Jinping era.
In terms of development finance, of working to channel capital to countries that need it most, what kind of China will emerge from the pandemic?
Developed-world sovereigns, and multilaterals like the IMF and World Bank, also care. They too want answers to a key question: in terms of development finance, of working to channel capital to countries that need it most, what kind of China will emerge from the pandemic?
Hong’s report doesn’t mince words.
“China’s infrastructure construction industry, financial institutions and policymakers are cognisant of the problems with [its] overseas infrastructure financing – including financial unsustainability for both host countries and China, and [a] lack of accountability for Chinese companies,” she writes.