January 27th, 2023
Via RANE Worldview, analysis of China’s BRI financing in 2023:
What Happened: According to a study conducted by the Global Development Policy Center at Boston Univerity, China has significantly reduced the scale of its Belt and Road Initiative (BRI) financing in recent years as part of a strategic shift that has seen Beijing focus on more “small [and] beautiful” projects (i.e. those that are lower value and higher quality) while avoiding projects on indigenous lands and at-risk habitats, the South China Morning Post reported Jan. 26.
Why It Matters: Though China will still eagerly continue to build infrastructure overseas to offshore surplus construction labor, Chinese lending will be much lower in the future, as poor loan repayment, and reputational and labor issues have mounted in BRI countries. China’s conservative approach will leave much of the developing world — especially sub-Saharan Africa and Central Asia — with unmet infrastructure financing needs amid a year of slow global economic growth following the COVID-19 crisis.
Background: In 2020-2021, China allocated just $10.5 billion in BRI development financing via 28 new loans, compared with $498 billion via 1,099 new loans across all of 2008-2021. Meanwhile, 66% of projects financed by China during the 2018-2021 period did not overlap with indigenous people’s lands, key habitats or nationally protected areas.
Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.