The political climate has changed quickly around the Belt and Road Initiative (BRI). Several countries have pushed back over worries about debt sustainability and discontent with financial terms in dealing with Chinese firms. This has already had a clear effect on newly signed BRI-related deals, and Chinese authorities have shifted their rhetoric, toning down and recalibrating BRI promotion.
The initiative is not going away: it benefits from significant high-level support, responds to Asia and Africa’s dire need for infrastructure financing, and continues pre-existing trends in China’s growing global economic engagement, including rising outbound investment. But we believe the next few quarters will witness changes in China’s approach, as well as a slowdown of financing and projects, to address both external and internal concerns generated by the BRI.
