- Jan 22, 2005
Are the wheels coming off China's Belt and Road megaproject?
Read more here...Hong Kong (CNN)Kenya is the latest country where China is frantically defusing a public relations storm over President Xi Jinping's signature Belt and Road megaproject.
In a statement Friday, China's Ministry of Foreign Affairs dismissed as "not true" numerous reports that a key port in Mombasa was at risk of being seized by Beijing over unpaid debts.
Speaking to journalists last week, Kenyan President Uhuru Kenyatta also pushed back, dismissing as "pure propaganda" reports based on a leaked letter from the country's Auditor General warning that assets belonging to the Kenya Port Authority -- including Mombasa's massive Kilindini Harbor, the largest port in East Africa -- were listed as collateral for a multi-billion-dollar loan to fund a railway project.
"The Chinese government themselves say this (it) is nonsense," Kenyatta said, while the AG's office denied publishing any such letter, copies of which circulated widely online.
Despite Beijing and Nairobi's vehement denials, concerns over the loans speak to a growing fear in many developing countries that their governments, in rushing to cash in on China's Belt and Road Initiative (BRI), have left themselves overextended, with Chinese state-owned companies ready to snap up ports, railways and other key infrastructure across the globe should debtors default.
Five years into the BRI, the sheen is also coming off the project in Beijing, amid an ongoing -- though temporarily paused -- trade war with the US, and concerns over future funding and returns on an increasingly unwieldy list of overseas investments.
For critics of the BRI, Sri Lanka's Hambantota port is the perfect example of the risks developing countries are taking on with their Chinese loans.
In December 2017, Beijing acquired a 99-year lease to the port -- located in a key strategic position on the Indian Ocean -- in return for forgiving some of the billions of dollars the South Asian country owed China.
The move sparked fears China would use similar defaults in other countries to acquire a host of new infrastructure, with both potential economic and military benefits -- leapfrogging rivals in the region such as India and the US.
In mid-2018, the Zambian government had to deny reports it was preparing to hand over control of multiple public assets, including the state broadcaster and Lusaka's Kenneth Kaunda International Airport, to China.