China’s Belt and Road Initiative project represents a massive injection of funds to the most struggling nations, while raising concerns about the way the country finances and manages its projects.
According to a report by AidData, a research center at the College of William and Mary, 42 low and middle-income countries have debt exposure to China exceeding 10 percent of their annual gross domestic product, per the Wall Street Journal.
The report identifies a whopping $385 billion in Chinese loans as not included in the nations’ official borrowing – nearly half of China’s overseas lending for construction of roads, railways and powerplants.
This secret debt has become exceedingly more common because lenders fund activity through special-purpose corporations instead of host governments.
Additionally, 35 percent of China’s overseas infrastructure projects have faced problems like corruption scandals, labor violations, environmental hazards and public outcry. Nearly 400 projects valued at $8.3 billion are linked to China’s …