Is China’s Belt and Road Initiative about to run out of money?
China's ambitious Belt and Road Initiative across Eurasia and Africa is facing a serious financing challenge, according to the country's senior bankers and government researchers.
Most of the countries along the route did not have the money to pay for the projects with which they were involved, according to Li Ruogu, the former president of Export-Import Bank of China.
Many were already heavily in debt and needed "sustainable finance" and private investment, he said, adding that the countries' average liability and debt ratios had reached 35 and 126%, respectively, far above the globally recognised warning lines of 20 and 100%.
Many Belt and Road projects were funded by major financial institutions - including the Asian Infrastructure Investment Bank, New Development Bank, China Development Bank, the Export-Import Bank of China and the Silk Road Fund - but there was still a huge funding gap of up to $500 billion a year, according to Wang Yiming, deputy head of the Development Research Centre of China's State Council.
