BEIJING • China's massive and expanding Belt and Road trade infrastructure project is running into speed bumps as some countries begin to grumble about being buried under Chinese debt.
First announced in 2013 by President Xi Jinping, the initiative, also known as the "new Silk Road", envisions the construction of railways, roads and ports across the globe, with Beijing providing billions of dollars in loans to many countries.
Five years on, Mr Xi has found himself defending his treasured idea as concerns grow that countries involved in the project may lack the means to pay back the Asian giant. "It is not a China club," Mr Xi said in a speech last week to mark the project's anniversary, describing the Belt and Road Initiative as an open and inclusive project. He said China's trade with Belt and Road countries had exceeded US$5 trillion (S$6.9 trillion), with outward direct investment surpassing US$60 billion.
But some are starting to wonder if it is worth the cost. During a visit to Beijing last month, Malaysia's Prime Minister Mahathir Mohamad said his country would shelve three China-backed projects, including a US$20 billion railway.
The party of Pakistan's new prime minister, Mr Imran Khan, has vowed more transparency amid fears about the country's ability to repay Chinese loans related to the multibillion-dollar China-Pakistan Economic Corridor.
Meanwhile, the exiled leader of the opposition in the Maldives, Mr Mohamed Nasheed, has said that China's actions in the Indian Ocean archipelago amounted to a "land grab" and "colonialism", with 80 per cent of its debt held by Beijing.
Sri Lanka has already paid a heavy price: Last year, the island nation had to grant a 99-year lease on a strategic port to Beijing over its inability to repay loans for the US$1.4 billion project.
"China does not have a very competent international bureaucracy in foreign aid, in expansion of soft power," said Ms Anne Stevenson-Yang, co-founder and research director at J Capital Research. "It brought up political issues like Malaysia that nobody anticipated."
"As the RMB (yuan) becomes weaker, and China is perceived internationally as a more ambiguous partner, it's more likely that the countries will take a more jaundiced eye on these projects."
The endeavour brings much-needed infrastructure improvements to developing nations, while giving China destinations to unload its industrial overcapacity and facilities to stock up on raw materials.
But a study by the Centre for Global Development, a United States think-tank, found "serious concerns" about the sustainability of the sovereign debt in eight countries receiving Silk Road funds. They were Pakistan, Djibouti, Maldives, Mongolia, Laos, Montenegro, Tajikistan and Kyrgyzstan.
The cost of a China-Laos railway project - US$6.7 billion - represents almost half of the South-east Asian country's gross domestic product, according to the study.
The International Monetary Fund has warned that Djibouti faces a "high risk of debt distress" as its public debt jumped from 50 per cent of GDP in 2014 to 85 per cent in 2016.
Africa has long embraced Chinese investment, helping make Beijing the continent's largest trading partner for the past decade.
Today, a number of African leaders will gather in Beijing for a summit focused on economic ties which will include talks on the Belt and Road Initiative.
At a daily press briefing last Friday, Chinese Foreign Ministry spokesman Hua Chunying denied that Beijing was saddling its partners with onerous debt, saying that its loans to Sri Lanka and Pakistan were only a small part of those countries' overall foreign debt.
"It's unreasonable that money coming out of Western countries is praised as good and sweet, while coming out of China, it's sinister and a trap," said Ms Hua.
Ms Stevenson-Yang said China's loans are quoted in US dollar terms, "but in reality, they're lending in terms of tractors, shipments of coal, engineering services and things like that, and they ask for repayment in hard currency".
Standard & Poor's said Beijing structures the infrastructure projects as long-term concessions, with a Chinese firm operating the facility for 20 to 30 years while splitting the proceeds with the local counterpart or government.
IMF head Christine Lagarde raised concerns about potential debt problems in April and advocated greater transparency. "It's not a free lunch, it's something where everybody chips in," she said.