Covid-19 pandemic puts brakes on Chinese projects

New Delhi: The Covid-19 pandemic has put brakes on Chinese President Xi Jinping’s dream project –– the Belt and Road Initiative (BRI) –– including the portion covered in India’s neighbourhood. Work has halted along the China-Pakistan Economic Corridor and Cambodia’s Sihanoukville Special Economic Zone, besides BRI projects across Indonesia, Myanmar, and Malaysia, EThas learnt.

The lack of travel facilities for Chinese labour is a key factor in this process, with thousands of Chinese workers unable to return to work on BRI projects across Asia and Europe, persons familiar with the BRI projects told ET. Over 130 countries have placed restrictions on the entry of Chinese citizens travelling from China, claimed one of the above quoted persons. The Chinese government has lobbied BRI countries, including Pakistan and some Pacific Island states, to ease these travel restrictions.

“The longer Chinese workers are unable to return to projects overseas, the longer the projects will languish incomplete, and some may be abandoned altogether (a phenomenon not unheard of, even within BRI’s short track record),” according to noted US think tank, Council for Foreign Relations of CFR, in its recent report titled ‘What the Covid-19 Pandemic May Mean for China’s Belt and Road Initiative’.

The Covid-19 crisis has also hampered China’s manufacturing supply chains, and it is no secret that BRI projects are primarily reliant on Chinese, rather than local material and supplies. “The pandemic has compromised the global supply chains that keep BRI projects moving forward, limiting the goods flowing out of China to the point that China actually ran a trade deficit during the first two months of the year,” the CFR report claimed.

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China’s shuttered factories not only need workers to be released from quarantines to resume normal output but also need restored supplies of raw materials, adequate stores of protective gear for workers, and active truckers and shipping ports to deliver their goods abroad, noted the CFR report.

“The pace at which BRI projects and their supply chains come back will depend on the effectiveness of China’s containment of the virus and speed its broader economic recovery,” claims the CFR report.

Amit Bhandari, Fellow, Energy and Environment Studies, from Mumbai-based Gateway House told ET, “Covid-19 will result in slower economic growth, if not an actual reduction in economic activity of South Asian countries. Tourism dependent countries such as Sri Lanka will be hurt harder. All this will make it more difficult for host economies to support the existing BRI projects. We have already seen Sri Lanka get into a debt trap and having to hand over Hambantota Port to China. The Covid-19 driven recession will make the debt situation of host countries even more unsustainable. This will create pressure upon China to either write-off BRI loans or restructure them significantly.”



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