China Taps the Brakes on Its Global Push for Influence

This year, some Chinese officials have expressed some concerns about lending under the program.

“Ensuring debt sustainability — that is very important,” Yi Gang, the new governor of China’s central bank, said at a conference in Beijing in late April.

While Belt and Road activity remains huge, it has certainly become more restrained, according to official data. In the first five months of 2018, Chinese companies signed contracts worth $36.2 billion in business, down nearly 6 percent from the same period a year ago.

Deal signings were down at this time last year from 2016, too, though by a lesser magnitude. Much of that downturn stemmed from big companies and governments’ saving their powder for a major Belt and Road forum held in May 2017 in Beijing that was attended by Xi Jinping, China’s top leader, President Vladimir V. Putin of Russia and other major political figures. After the forum, activity surged.

“I sensed that the level of enthusiasm about B.R.I. had certainly shifted down a few notches relative to last year,” said Eswar Prasad, a Cornell economist and former head of the International Monetary Fund’s China division who recently visited Beijing and had extensive conversations with Chinese financial policymakers.

Project activity could pick up later this year, of course. But an uncertain global economic outlook has given Beijing even more reasons to be cautious.

A protracted trade war between the United States and other countries, particularly China, could shake confidence and stunt growth. The United States has pushed up short-term interest rates, making it more costly to borrow money. In the past, interest rate increases in the United States have sometimes caused financial turbulence elsewhere, especially in emerging markets.

Article source: https://www.nytimes.com/2018/06/29/business/china-belt-and-road-slows.html?partner=rss&emc=rss