China's 'Silk Road' project runs into debt jam

Agencies
September 2, 2018

Beijing, Sept 2: China's massive and expanding "Belt and Road" trade infrastructure project is running into speed bumps as some countries begin to grumble about being buried under Chinese debt.

First announced in 2013 by President Xi Jinping, the initiative also known as the "new Silk Road" envisions the construction of railways, roads and ports across the globe, with Beijing providing billions of dollars in loans to many countries.

Five years on, Xi has found himself defending his treasured idea as concerns grow that China is setting up debt traps in countries which may lack the means to pay back the Asian giant.

"It is not a China club," Xi said in a speech on Monday to mark the project's anniversary, describing Belt and Road as an "open and inclusive" project.

Xi said China's trade with Belt and Road countries had exceeded $5 trillion, with outward direct investment surpassing $60 billion.

But some are starting to wonder if it is worth the cost.

During a visit to Beijing in August, Malaysia's Prime Minister Mahathir Mohamad said his country would shelve three China-backed projects, including a $20 billion railway.

The party of Pakistan's new prime minister, Imran Khan, has vowed more transparency amid fears about the country's ability to repay Chinese loans related to the multi-billion-dollar China-Pakistan Economic Corridor.

Meanwhile, the exiled leader of the opposition in the Maldives, Mohamed Nasheed, has said China's actions in the Indian Ocean archipelago amounted to a "land grab" and "colonialism", with 80% of its debt held by Beijing.

Sri Lanka has already paid a heavy price for being highly indebted to China.

Last year, the island nation had to grant a 99-year lease on a strategic port to Beijing over its inability to repay loans for the $1.4-billion project.

"China does not have a very competent international bureaucracy in foreign aid, in expansion of soft power," Anne Stevenson-Yang, co-founder and research director at J Capital Research, told.

"So not surprisingly they're not very good at it, and it brought up political issues like Malaysia that nobody anticipated," she said.

"As the RMB (yuan) becomes weaker, and China is perceived internationally as a more ambiguous partner, it's more likely that the countries will take a more jaundiced eye on these projects."

The huge endeavour brings much-needed infrastructure improvements to developing countries while giving China destinations to unload its industrial overcapacity and facilities to stock up on raw materials.

But a study by the Center for Global Development, a US think-tank, found "serious concerns" about the sustainability of the sovereign debt in eight countries receiving Silk Road funds.

Those were Pakistan, Djibouti, Maldives, Mongolia, Laos, Montenegro, Tajikistan and Kyrgyzstan.

The cost of a China-Laos railway project -- $6.7 billion -- represents almost half of the Southeast Asian country's GDP, according to the study.

In Djibouti, the IMF has warned that the Horn of Africa country faces a "high risk of debt distress" as its public debt jumped from 50%of GDP in 2014 to 85% in 2016.

Africa has long embraced Chinese investment, helping make Beijing the continent's largest trading partner for the past decade.

On Monday, a number of African leaders will gather in Beijing for a summit focused on economic ties which will include talks on the "Belt and Road" programme.

China bristles at criticism

At a daily press briefing on Friday, foreign ministry spokeswoman Hua Chunying denied that Beijing was saddling its partners with onerous debt, saying that its loans to Sri Lanka and Pakistan were only a small part of those countries' overall foreign debt.

"It's unreasonable that money coming out of Western countries is praised as good and sweet while coming out of China it's sinister and a trap," she said.

Stevenson-Yang said China's loans are quoted in dollar terms, "but in reality, they're lending in terms of tractors, shipments of coal, engineering services and things like that, and they ask for repayment in hard currency."

Standard & Poor's said Beijing structures the infrastructure projects as long-term concessions, with a Chinese firm operating the facility for a period of 20 to 30 years while splitting the proceeds with the local counterpart or government.

The head of the International Monetary Fund, Christine Lagarde, raised concerns about potential debt problems in April and advocated greater transparency.

"It's not a free lunch, it's something where everybody chips in," she said.

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News Network
April 18,2020

Washington, Apr 18: The United States on Friday passed 700,000 confirmed coronavirus cases, according to a tally maintained by Johns Hopkins University.

With the highest number of cases and deaths of any country in the world, the US had recorded 700,282 cases of COVID-19 and 36,773 deaths as of 8:30 pm (0030 GMT Friday), according to the Baltimore-based university.

That marked an increase of 3,856 deaths in the past 24 hours, but that figure likely includes "probable" virus-linked deaths, which had not previously been counted.

This week, New York City said it would add 3,778 "probable" virus deaths to its official count.

The US Centers for Disease Control and Prevention gave a toll Friday night of 33,049 dead, including 4,226 probable virus-linked deaths.

The United States has seen the highest death toll in the world in the coronavirus pandemic, ahead of Italy (22,745 deaths) although its population is just a fifth of that of the US.

Spain has recorded 19,478 deaths, followed by France with 18,681.

Trump announces $19 billion relief for farmers amid COVID-19 epidemic

President Donald Trump on Friday announced a $19 billion financial rescue package to help the agriculture industry weather the staggering economic downturn sparked by measures to defeat the coronavirus.

Trump told a press conference the government "will be implementing a $19 billion relief program for our great farmers and ranchers as they cope with the fallout of the global pandemic."

The program will include direct payments to farmers, ranchers and producers who Trump said have experienced "unprecedented losses during this pandemic."

Agriculture Secretary Sonny Perdue said US farmers have been hit hard by a sharp shift in demand, as schools and restaurants close and more Americans eat at home.

That has disrupted the food supply chain, forcing farmers in many places to destroy dairy output and plow under crops that no longer have buyers.

"Having to dump milk and plow under vegetables ready to market is not only financially distressing, but it's heartbreaking as well to those who produce them," Perdue said.

Perdue said some $3 billion of the money would go to buying produce and milk from such farmers, and redistribute it to community food banks.

Millions of Americans have recently turned to food pantries for meals and groceries after losing their jobs.

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News Network
May 21,2020

Canberra, May 21: Australian Prime Minister Scott Morrison and his Indian counterpart, Narendra Modi, are looking forward to deepening the countries' strategic relationship, with both sides expected to sign a range of pacts from defence to trade in strategic sectors amid heightened tensions with China over Beijing's response to coronavirus pandemic.

During a virtual summit, scheduled to take place on June 4, both leaders are expected to ramp up efforts to diversify Australia's export markets and find trusted suppliers of vital products and components, a local newspaper, The Australian reported on Tuesday.

The new agreements will focus on reliable supply chains in key strategic sectors, including medical goods, technology and critical minerals, amid heightened tensions with China over Beijing's response to coronavirus pandemic.

The leaders will seal a new defence agreement allowing reciprocal access to bases and co-operation on military technology projects, while a new education partnership will be on the table to help overcome Australian university reliance on Chinese students.

The talks in terms of strategic convergence, now have greater significance as COVID-19 exacerbates the strategic contest between the US and China, and forces like-minded countries to seek out reliable partners.

Australian farmers could also benefit, with talks underway on expanding agricultural exports to India, including barley, as China throws up new trade barriers, media reports stated.

The virtual summit follows the cancellation of Morrison's planned state visit to India in January due to the bushfires.

Morrison said last year, ahead of his planned visit, that India was "a natural partner for Australia", referring to the countries' "shared values" -- a point of differentiation with China.

Former Department of Foreign Affairs and Trade secretary Peter Varghese, who wrote a landmark report on the bilateral relationship in 2018, was quoted by the newspaper as saying that India would be even more important to Australia in the post-COVID world. "If one of the lessons from COVID is that countries need to spread their risk, then finding new markets or building up existing markets is a crucial part of that," he added.

Varghese noted that India, a member of the Quadrilateral Security Dialogue along with Australia, Japan and the US, was a vital strategic partner to Australia in helping "constrain China's ambitions to be the predominant power".

"That shared objective between Australia and India of not wanting to see the region dominated by China is a key component of building up our geopolitical relationship," he told The Australian.

The summit also follows recent talks between Australian Foreign Minister Marise Payne and Indian counterpart Subrahmanyam Jaishankar on the pandemic response and Australia's call for an independent inquiry, which was overwhelmingly backed at the World Health Assembly on Tuesday.

Australia wants to support India to develop a domestic critical minerals processing industry, which would provide Western nations with an alternative to sourcing the materials from China.

Meanwhile, India has strong expertise as a manufacturer of drugs and medical equipment, while Australia is a centre of biomedical research, opening the possibility for closer co-operation in the key sector, the media reported further.

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News Network
February 3,2020

Beijing, Feb 3: The first batch of patients arrived on Monday at a specialised hospital built in just 10 days as part of China's intensive efforts to fight a new virus.

Huoshenshan Hospital and a second facility with 1,500 beds that's due to open this week were built by construction crews who are working around the clock in Wuhan, the city in central China where the outbreak was first detected in December.

The Wuhan treatment centres mark the second time Chinese leaders have responded to a new disease by building specialised hospitals almost overnight. As severe acute respiratory syndrome, or SARS, spread in 2003, a facility in Beijing for patients with that viral disease was constructed in a week.

The first batch of patients arrived at the Huoshenshan Hospital at 10 am on Monday, according to state media. The reports gave no details of the patients' identities or conditions.

The ruling Communist Party's military wing, the People's Liberation Army, sent 1,400 doctors, nurses and other personnel to staff the Wuhan hospital, the official Xinhua News Agency said. The government said earlier some have experience fighting SARS and other outbreaks.

Authorities have cut most road, rail and air access to Wuhan and surrounding cities, isolating some 50 million people, in efforts to contain the viral outbreak that has sickened more than 17,000 and killed more than 360 people.

The Huoshenshan Hospital was built by a 7,000-member crew of carpenters, plumbers, electricians and other specialists, according to the Xinhua News Agency.               Photos in state media showed workers in winter clothing, safety helmets and the surgical-style masks worn by millions of Chinese in an attempt to avoid contracting the virus.

About half of the two-storey, 600,000-square-foot building is isolation wards, according to the government newspaper Yangtze Daily. It has 30 intensive care units.

Doctors can talk with outside experts over a video system that links them to Beijing's PLA General Hospital, according to the Yangtze Daily. It said the system was installed in less than 12 hours by a 20-member "commando team" from Wuhan Telecom Ltd.

The building has specialised ventilation systems and double-sided cabinets that connect patient rooms to hallways and allow hospital staff to deliver supplies without entering the rooms.

The hospital received a donation of "medical robots" from a Chinese company for use in delivering medicines and carrying test samples, according to the Shanghai newspaper The Paper.

In other cities, the government has designated hospitals to handle cases of the new virus.

In Beijing, the Xiaotangshan Hospital built in 2003 for SARS is being renovated by construction workers. The government has yet to say whether it might be used for patients with the new disease.

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