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China’s belt and road pivots to ‘small yet smart’ projects with ‘modest’ US$107 billion financing pledge
- Xi Jinping says Beijing will spend less on loans than in previous years while stressing green, low-cost programmes in global infrastructure strategy
- China is seeking ‘more bang for its buck’ and turning away from big ‘vanity projects’, analyst says
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China has pledged 780 billion yuan (US$106.6 billion) in new financing for its Belt and Road Initiative – a modest figure compared to previous years, according to observers, but with the potential to deliver more bang for the buck as Beijing pivots its signature global infrastructure strategy towards “small yet smart” projects.
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At the Belt and Road Forum for International Cooperation in Beijing last week, President Xi Jinping said China would allocate 350 billion yuan to the China Development Bank and a similar amount to the Export-Import Bank of China. The country will allocate an additional 80 billion yuan to the Silk Road Fund.
He said the funds would support belt and road projects “on the basis of market and business operation”.
Linda Calabrese, research fellow and development economist at the Overseas Development Institute in London, said the new financial commitments were modest compared with what was spent in the past and tallied with the narrative about “small but beautiful” or “small yet impactful” projects that had driven recent belt and road discussions.
“Small yet smart” and “small but beautiful” have emerged as belt-and-road buzzwords to describe smaller and more targeted projects financed with smaller loans.
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