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China slows BRI investments amid concerning economic situation
Beijing: The slow investment in Belt and Road Initiative (BRI) projects establishes the fact that Beijing is dealing with an economic downfall as the investment projects in the 147 countries went down in the first half of this year and it is likely to decline further.
According to the United Nations Conference on Trade and Development (UNCTAD), the outlook for FDI in 2022 is "worrisome". International project finance in infrastructure sectors is expected to continue to provide growth momentum. Reports say that a new project activity in the first quarter of 2022 recorded a decrease of 21 per cent, and international project finance deals were down 4 per cent.
The same trend is observed in BRI investments, as per European Times.
According to a study by the Green Finance & Development Center, Chinese Belt and Road financing and investments, in the participating 147 countries of BRI fell in the first half of 2022.
During the period financing and investments were recorded at USD 28.4 billion, compared with USD 29.4 billion in the same period a year earlier. The first-half figures were 40 per cent lower compared with the same period in 2019.
The declining trends in BRI investments are likely to continue in the second half of 2022 as well due to both China's own economic challenges as well as global uncertainty.
Notably, BRI is stretching its business from East Asia to Europe, Africa and the Caribbean, where it is helping to develop crucial infrastructures such as rail-road, ports, water pipelines and power projects. It is alleged to exploit disproportionate leverage over certain economically weaker partners in bilateral negotiations pertaining to BRI projects, European Times reported.
In terms of carbon emissions, the green energy total engagement (solar, wind, hydro) in the first half of 2022 dropped by 22 per cent compared to the first half of 2021 to about USD 3 billion.
While, the Chinese Ministry of Commerce (MOFCOM) plans for China to invest USD 550 billion (that includes non-BRI countries), down 25 per cent from USD 740 billion in the 2016-2020 period, European Times reported.
In May, Chinese Premier Li Keqiang underlined the importance of implementing policies for stabilising the economy and supporting market entities to bring the situation back to the normal track in an unusually stark warning that comes as COVID curbs have adversely impacted the second-largest economy.
Keqiang had painted a grim picture of the job market in the world's most populous nation due to COVID-19 lockdowns. He had called the employment situation "complex and grave."
It is to be mentioned, China Evergrande Group, one of the largest property developers in the country by sales has said that it will unveil the restructuring plan within 2022, amid the constantly drowning economy due to the COVID-19 pandemic.
Earlier, the troubled property developer had promised to release an initial restructuring plan by the end of July, according to The Wall Street Journal. (ANI)