![]() ![]() ![]() The projects could in some instances possibly “compromise the recipient state’s telecommunications infrastructure or place the country at the center of strategic competition between Beijing and other great powers,” they wrote. In some cases, China-funded projects even bore the possibility of espionage, the authors warn. The authors also point out that on top of Chinese banks requiring Chinese contractors get the jobs, the contractors don’t even “transfer skills to local workers, and sometimes involve inequitable profit-sharing arrangements,” which didn’t benefit the local community at all. This could be increased risk of default, repayment difficulties, or it could even be such that “certain completed projects have not generated sufficient revenue to justify the cost.” Disengagement from local needs (Graphic: David Foster/Yahoo Finance) Unsustainable financial burdensīut these loans- some of which come up to billions of dollars - often end up putting countries in a fiscally worse-off position, they explained. Those projects often entailed “opaque bidding processes for contracts and financial terms that are not subject to public scrutiny,” they added, which usually means a Chinese loan is followed by a Chinese contractor on the construction site. The report explained that Chinese investments most often into capital-hungry developing countries like Djibouti and Pakistan have given Beijing “control over select infrastructure projects through equity arrangements, long-term leases, or multi-decade operating contracts.” Lack of transparency These are the 7 challenges presented by CNAS: Erosion of national sovereignty But they’re building up the second pillar of legitimacy with this collection of foreign policy successes, prestige, influence. “It’s been almost a cliché that the Chinese government is legitimate as long as there is 7.5% growth,” Eder said. On top of foreign policy interests, China’s big push was also born out of fears over waning economic growth, Thomas Eder, a research associate at German think-tank Mercator Institute for China Studies told Yahoo Finance in a previous interview. In this Apphoto, an attendee at a conference looks up near a portrait of Chinese President Xi Jinping with the words "Xi Jinping and One Belt One Road" and "One Belt One Road strategy," in Beijing. ![]()
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