Chinese infrastructure projects under its One Belt One Road (OBOR) initiatives in Central Asia, Pakistan and Myanmar are projected to lose money due to underutilisation and could potentially cause more harm than good, a prominent US think-tank said in a report on Thursday.
In its latest report on China, the Centre for Strategic and International Studies (CSIS) said India has expressed significant hesitation toward the Belt and Road Initiative (BRI) of China.
Leaders in New Delhi opted out of both the 2017 and 2019 Belt and Road Forums. In addition to being generally skeptical of the BRI, one specific major concern is building of the China Pakistan Economic Corridor (CPEC) through Kashmir, it said.
Economic considerations further complicate these concerns, the CSIS said in its report.
"BRI infrastructure projects in Central Asia, Pakistan and Myanmar are projected to lose money due to underutilisation and could potentially cause more harm than good, it said.
For instance, the Kara-Balta oil refinery – Kyrgyzstan’s largest Chinese investment – has faced significant problems with overcapacity in the recent years.
In Thailand, officials are still grappling with the difficulties of financing and negotiating the USD 9.9 billion Thai-Chinese high-speed railway project, which is already long delayed.
The CSIS said accepting Chinese capital may come with expectations that Chinese companies will then be contracted to manage infrastructure, giving them at the least some influence over critical infrastructure.
“From China’s perspective, investment into strategic locations like Gwadar will help diversify China’s transport network for critical natural resources like oil and gas, which could help reduce dependency on trade routes, such as the Strait of Malacca, through which China currently receives much of its oil and gas,” it said.
According to the CSIS, if successfully implemented, the BRI could help re-orient a large part of the world economy toward China.
Increasing the amount of trade, investment, and connectivity between China and countries throughout Eurasia will also render these countries more dependent on the Chinese economy, increasing China’s economic leverage over them. This may empower China to more readily shape the rules and norms that govern the economic affairs of the region, the report said.