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China’s silk road isn’t turning out to be smooth

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12.07.2018

NEW DELHI – You may not have noticed, what with the outbreak of trade war with the United States and all, but China’s economic diplomacy has had a bad few weeks. The country’s flagship “Belt and Road” initiative is dealing with ever-greater resistance, slowing a momentum that once seemed unstoppable. In fact, I’d argue that the BRI is stalled.

The clearest sign of this, perhaps, was the news that Malaysia had halted Chinese projects worth $22 billion, including a controversial rail link along the country’s east coast. The decision looked inevitable after May’s elections.

One of the pillars of Prime Minister Mahathir Mohamad’s successful campaign to unseat Najib Razak was the charge that Najib’s close links to China had bred corruption and bad decisions. Mahathir’s associates linked the scandal at the 1MDB development fund to BRI financing, while Najib’s associates doubled down, putting Chinese President Xi Jinping on their party posters. One Malaysian politician complained visitors might have thought Xi himself was on the ballot.

In many ways, China’s stumbles in Malaysia are exactly what BRI skeptics had always warned would happen in countries across Asia.

Projects that might be easy to execute in China would run into delays and cost overruns in less-regimented countries; growth in debt, deficits and Chinese immigration would spark political opposition; and, when a new political leadership........

© The Japan Times