Connect with us

Business

China revamps lending initiative to developing countries as it reins in risk on November 7, 2023 at 5:30 pm Business News | The Hill

Published

on

China is revamping the Belt and Road Initiative that pumped billions of dollars in grants and loans into developing countries over the last 10 years, as it attempts to rein in the risks that plagued its earlier investments, according to a new report released on Monday.

The Asian nation has shifted its attention to reducing the risk of not being repaid, its exposure to environmental, social or governance (ESG) factors and potential damage to its reputation in the developing world, the report from AidData, a research lab at William & Mary, found.

“Beijing has launched a far-reaching effort to de-risk the (Belt and Road Initiative) by refocusing its time, money, and attention on distressed borrowers, troubled projects, and sources of public backlash in the Global South,” the report said.

Advertisement

“It is learning from its mistakes and becoming an increasingly adept international crisis manager,” it added.

With more than half of its loans now in repayment, China is facing the fallout from the lack of guardrails in place at the outset of its Belt and Road Initiative. About 19 percent of borrowers had fallen behind on repayments as of 2021, up from 7 percent in 2000, according to the report.

As a result, Beijing is shifting away from infrastructure project lending — once a central feature of its initiative — and moving toward emergency rescue lending to ensure its borrowers “have enough cash on hand to service their outstanding infrastructure project debts,” the report said.

It has also sought to put in place more stringent ESG safeguards, with the risk prevalence rate in the country’s infrastructure project portfolio falling from 63 percent in 2018 to 33 percent in 2021, according to the report.

Advertisement

This shift comes as the U.S. and its allies have ramped up their own lending to the developing world in recent years in an effort to compete with Beijing. In 2021, America committed $61 billion to low- and middle-income countries, narrowing the gap with China.

Beijing has also pulled back slightly on its investments to developing countries. It committed $79 billion to low- and middle-income countries in 2021, down from an average of $117 billion a year between 2013 and 2017.

However, the report warned that Western nations don’t “seem to have a good understanding” of the recent changes China has made to its Belt and Road Initiative.

“Consequently, those who make and shape policy in Washington, London, Paris, Berlin, Tokyo, Rome, and Ottawa increasingly run the risk of competing with a version of the BRI that no longer exists,” the report noted.

Advertisement

​Business, International, News, Technology, belt and road initiative, China, esg China is revamping the Belt and Road Initiative that pumped billions of dollars in grants and loans into developing countries over the last 10 years, as it attempts to rein in the risks that plagued its earlier investments, according to a new report released on Monday. The Asian nation has shifted its attention to reducing…  

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Queen Latifah Says Female Leaders Need to Do These 4 Things to Succeed on December 1, 2023 at 9:06 pm Entrepreneur: Latest Articles

Published

on

By

The celebrated actress, entertainer and entrepreneur has strong advice for women in business.

​Women Entrepreneur™ The celebrated actress, entertainer and entrepreneur has strong advice for women in business.  

Advertisement
Continue Reading

Business

A Judge Blocked a U.S. State’s Attempt to Ban TikTok for All Residents — Here’s Why on December 1, 2023 at 9:21 pm Entrepreneur: Latest Articles

Published

on

By

Montana residents would have faced $10,000 fines for using the app.

​News and Trends Montana residents would have faced $10,000 fines for using the app.  

Advertisement
Continue Reading

Business

Walmart joins list of companies nixing ads on Musk’s X on December 1, 2023 at 10:02 pm Business News | The Hill

Published

on

By

Walmart joined the list of companies who have pulled advertisements from X, the platform formerly known as Twitter, Friday.

“We aren’t advertising on X as we’ve found some other platforms better reach our customers,” Walmart said in an emailed statement to The Hill.

Walmart’s emailed statement comes two days after X owner Elon Musk told companies who were taking their advertisements off the platform to “go f— yourself.” When New York Times financial columnist Andrew Ross Sorkin asked Musk during the publication’s DealBook Summit if he didn’t want the companies to advertise, he said “Don’t advertise. If someone is going to try and blackmail me with advertising? Blackmail me with money? Go f— yourself.”

Advertisement

Musk received backlash last month after appearing to endorse an antisemitic conspiracy theory. The company itself faced criticism a day after the tweet when Media Matters for America said it found ads for companies like Oracle, Apple, Bravo and Xfinity next to posts celebrating the Nazi Party and Adolf Hitler on the platform. 

Companies like Apple and Disney announced that they were pulling their ads from the platform in the wake of Musk’s seeming endorsement of the antisemitic conspiracy theory and the Media Matters findings.

Musk has dismissed claims of antisemitism, saying “[n]othing could be further from the truth.”

“I wish only the best for humanity and a prosperous and exciting future for all,” Musk continued in a post on X.

Advertisement

​Business, Media, News, Technology, Twitter, Walmart, X, X ads Walmart joined the list of companies who have pulled advertisements from X, the platform formerly known as Twitter, Friday. “We aren’t advertising on X as we’ve found some other platforms better reach our customers,” Walmart said in an emailed statement to The Hill. Walmart’s emailed statement comes two days after X owner Elon Musk told…  

Continue Reading

Trending