SILK ROAD BLUES: China’s Global Building Spree Runs Into Trouble in Pakistan. “To fund a 70-nation infrastructure initiative, Beijing has been extending loans in opaque deals often contingent on using Chinese contractors.”

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via WSJ:

Financed and built by Chinese state-run companies, the soon-to-be-finished overhead railway through Lahore is among the first projects in China’s $62 billion plan for Pakistan. Beijing hoped the $2 billion air-conditioned metro, sweeping past crumbling relics of Mughal and British imperial rule, would help make Pakistan a showcase for its global infrastructure-building spree.

Instead, it has become emblematic of the troubles that are throwing China’s modern-day Silk Road initiative off course.

China’s global plan, called the “Belt and Road Initiative,” involves some 70 countries and has been likened to the U.S. Marshall Plan that helped rebuild Europe after World War II. By building a network of ports, railways, roads and pipelines, China aims to open new East-West trade routes, generate business for Chinese companies and expand its strategic influence.

While the Americans mainly used grants in Postwar Europe, China has mostly extended loans in opaque deals often contingent on using Chinese contractors. Pakistan is now one of several countries grappling with the financial and political fallout of taking on so much Chinese debt.

With a general election in Pakistan scheduled for July 25, an ascendant opposition is pledging to publish secret details about the financing of Chinese projects, including the Orange Line, and Pakistani industry is agitating for less-generous perks for Chinese companies.

Well, this is getting sticky.

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h/y SG

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