Chinese Green Finance Center and Development at Fudan University has released a report on investment in the Belt and Road Initiative (BRI). In the first half of this year, China’s investment in Russia went to zero and its investment in Pakistan dropped by 56%.
According to Radio Free Europe/Radio Liberty, both Russia and Pakistan have been among the top beneficiaries of Chinese development spending through the BRI.
Moscow signed deals worth about 2 billion dollars in 2021 alone and Islamabad hosts a 62 billion dollars collection of infrastructure and energy projects known as the China-Pakistan Economic Corridor (CPEC).
The Fudan University report highlights the changing nature of the BRI as it adapts to a combination of a strained global economy, China’s shifting position in the world, and many countries who inked deals and took out loans through the initiative now grappling with a growing debt crisis.
The Fudan University paper emphasizes that the nature of the BRI is changing as it adjusts to a struggling global economy.
China is shifting its role in the globe, and several nations that signed agreements and obtained loans through the program but they are now facing a worsening debt crisis.
Beijing is starting to avoid the bad news as overseas investment lending continues to decline.
According to the report, Chinese investments in 147 Belt and Road nations totaled 28.4 billion dollars in the first half of 2022, down from 29.6 billion dollars during the same period of time last year. Among them, investment decreased by 56% in Pakistan and to zero in Russia.
Christoph Nedopil Wang is the head of the Center for Green Finance and Development at Fudan University. In an interview on Sunday, Wang stated that it was completely unexpected that China’s investment in Russia had reached zero.
However, it is not as though China and Russia have no trade relations at all, particularly in the area of fossil fuels. It’s possible that Beijing lowered investment in the first half of the year to lower the possibility of secondary sanctions or other factors.
As for the Pakistani brothers, Wang believes that Pakistan has been the most important axis of the China-Pakistan Economic Corridor, and over the years, China and Pakistan have signed infrastructure and investment contracts in energy, road and rail transport.
However, as Pakistan faced major political changes since last year, it is not surprising that the Chinese side has reassessed the political risks and economic situation in the country and has held off on investment. Chinese outlays in Pakistan declined by 56% during the first half of 2022.