6/24/2023 0 Comments Push 40 bri![]() 75% of these say the BRI can support a green recovery and sustainable development.87% expect BRI projects to contribute to post-Covid recovery.Geopolitical tensions were cited as problematic by just 8%of respondents.Financial markets provide very limited funding.Chinese development and state-owned banks still offer the most financial support. ![]() No central bank reported a reduction in funding from China.Some governments are shifting priorities away from the BRI.Lockdowns and social distancing: two-thirds of BRI projects hit by Covid-19 restrictions.Moreover, the outlook in a post-lockdown world (once the debt issues are worked out) appears promising – with 80% of respondents believing that BRI projects will boost economic recovery and, of these, more than 70% saying they can contribute to a green recovery and more sustainable development. But China’s relative success in social distancing and its vaccination of key workers has enabled it to resume much of its pre-crisis growth.ĭespite its own economic challenges, central bank survey respondents indicated little evidence that Chinese institutions had restricted BRI financing. This contributed to a year-on-year contraction in GDP of 6.8%% in the first quarter of 2020, according to China’s National Bureau of Statistics. ![]() Any failure to repay BRI debts would push up the non-performing loan burden of China’s development banks and commercial banks at a difficult time.Īs the first victim of the Covid‑19 pandemic, China also had to implement its own strict lockdown measures in early 2020 and experienced stresses to its manufacturing due to supply chain interruptions and deteriorating trade ties with the US and other key trade partners. But, when combined, a shift in government priority away from the BRI and local funding constraints had an even greater impact.Ĭhina is now one of the world’s largest creditors and has invested more than $500 billion in BRI-related projects, often lending to developing nations – particularly in Africa and Latin America. The primary reason for disruption was related to social distancing and lockdown measures limiting work. The Belt and Road Initiative ( BRI) Survey of Central Banks 2021 found that the Covid‑19 crisis has affected many BRI projects, with more than two-thirds of central banks saying it has had a negative impact on progress to some degree. China, as a member of the G20, signed the pledge. This delayed around $16.5 billion in debt servicing to official bilateral creditors. As a result, all members of the Group of 20 extended a debt moratorium to nations they deemed the poorest borrowers in April 2020. This has come at a time when the debt profile of some vulnerable nations has become precarious. Since February 2020, the IMF has made $250 billion available to member countries, representing one-quarter of its total $1 trillion lending capacity, to assist in the battle against Covid‑19. Some countries have emerged worse off than others, particularly low- and lower-middle-income countries. Most governments worldwide have also been forced to take on substantially more debt to fund Covid‑19 emergency healthcare measures, as well as economic crisis-fighting policies aimed at limiting the immediate economic and social costs of lockdowns. The plunge in economic output was the result of social distancing measures implemented to contain the novel coronavirus, which in turn caused supply chain disruptions and major project delays. In April 2021, the International Monetary Fund ( IMF) said the global economy contracted by 3.3% in 2020 – the steepest downturn since the Great Depression of the 1930s. The Covid‑19 pandemic had a stark effect on global GDP growth last year. This article is part of The IFF China Report 2021
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