China’s Silk Road Isn’t So Smooth
Skeptics’ warnings are beginning to come true.
Sri Lanka’s interest payments to China alone topped $11 billion a year.
Photographer: Atul Loke/Bloomberg
You may not have noticed, what with the outbreak of trade war with the U.S. and all, but China’s economic diplomacy has had a bad few weeks. The country’s flagship Belt and Road Initiative is dealing with ever-greater resistance, slowing a momentum that once seemed unstoppable. In fact, I’d argue that the BRI is stalled.
The clearest sign of this, perhaps, was the news that Malaysia had halted Chinese projects worth $22 billion, including a controversial rail link along the country’s east coast. The decision looked inevitable after May’s elections. One of the pillars of Prime Minister Mahathir Mohamad’s successful campaign to unseat Najib Razak was the charge that Najib’s close links to China had bred corruption and bad decisions. Mahathir’s associates linked the scandal at the 1MDB development fund to BRI financing, while Najib’s associates doubled down, putting Chinese President Xi Jinping on their party posters. One Malaysian politician complained visitors might’ve thought Xi himself was on the ballot.