Ambiguity in lending towards the much-hyped Belt and Road Initiative (BRI) has led to serious concerns across the board, especially as cost of the project has escalated significantly over the last few years. Since Beijing has never published any official data on its lending and investments, analysts said that a fair risk assessment on account of delay in project implementation cannot be undertaken due to lack of transparency. Besides, the opacity in the lending pattern has also made it difficult for rating agencies and other think tanks to analyze the possible impact on both China as well as the supposed beneficiary countries.

Delay in project implementation in several countries has plagued the BRI umbrella, in turn impacting the Chinese economy.

China’s total debt to GDP ratio—an indicator of how well a country has managed to pay back its debt in relation to its GDP—is already over 315 per cent.

“Popular estimates for Chinese investment under the BRI range from $1 trillion to $8 trillion, hardly a rounding error. Without a clearer sense of the BRI’s scale, it is difficult to assess its economic and strategic implications. A closer look reveals the highest figures are inflated, scoring political points for Beijing in the short term but also creating unrealistic expectations,” wrote Jonathan E. Hillman, senior fellow, Economics Program and director, Reconnecting Asia Project, at the Center for Strategic and International Studies.

While economic uncertainty looms large on several countries such as Zambia, Djibouti, Republic of Congo, Maldives, Tonga, Laos, Pakistan and Kyrgyzstan leading to questions on repayment, the regular disruptions and delays in project execution have hit Beijing. The increase in cost of the project, spanning across 70 countries, has already led to a surge in the debt to GDP ratio of several countries.

However, two analysts IndianNarrative.com spoke to said that China could be getting trapped in its own debt diplomacy.

The BRI, Chinese President Xi Jinping’s dream project, was kicked off in 2013.

Most of the firms, which have undertaken the mega project are Chinese, “with close ties to the state,” as the Architect’s Newspaper put it.

“Given the opacity of China’s BRI initiative and its open-ended timeline, impact analysis of the initiative is a challenge,” a report by Moody’s Analytics in 2019 said, much before the world had to grapple with the unprecedented economic and health crisis induced by the coronavirus.

“There is no published data to understand the situation clearly, we do know that there has been a substantial escalation in the overall costs which naturally will have an impact on China as well as other beneficiary countries,” one of the two analysts said.

The other analyst said that the going was becoming tough even before the coronavirus crisis. “So one can assume that things will be even tougher now for both the lending country as well as those countries which have benefited,” he said.

According to reports, instances of internal discords in the recipient countries over BRI projects have risen over the last few years.

China, which is the largest global creditor today, has extended loans to more than 150 countries. However, it is not a member of the Paris Club—an informal group of creditor nations with the aim to strike workable repayment solutions. Beijing is also not part of the Organization for Economic Co-operation and Development (OECD). Both Paris Club and OECD maintain loan records of official creditors..