Covid-19 deals blow to China's global plans

New Delhi: The coronavirus pandemic has dealt a body blow to China's landmark initiative for global influence domination the Belt and Road Initiative (BRI) with most of the 142 recipient nations now seeking to renegotiate the deal.

Chinese policy advisers and bankers said that Beijing was considering a number of responses, including the suspension of interest payments on loans from the country's financial institutions. But they also warned against expectations that China will forgive debts outright.

"We understand a lot of countries are looking to renegotiate loan terms," said a researcher at the China Development Bank, a Chinese 'policy bank' that along with the Export-Import Bank of China spearheads hundreds of billions of dollars in lending to BRI projects around the world.

"But it takes time to strike a new deal and we cannot even travel abroad right now. The BRI loans are not foreign aid. We need to at least recoup principal and a moderate interest.

It is okay for 20 per cent of our portfolio projects to have problems," the researcher said on conditions of anonymity.

"But we cannot tolerate half of them going under. We might consider extending loans and giving interest relief.

But in general, our loans are issued according to market principles," he said. The BRI, which was launched in 2013 as the signature foreign policy initiative of Chinese President Xi Jinping, is aimed at building infrastructure and boosting Beijing's influence around the world.

Most of the countries that have officially signed up to the project are developing countries, with the weakest credit ratings in the world.

Several nations that have applied to Beijing for debt relief are understood to be in Africa, where the Chinese government, banks and contractors have lent $143 billion between 2000 and 2017, according to the Johns Hopkins School of Advanced International Studies.