Impact of COVID-19 on China's belt and road Initiative

Publishing date- 14/04/2020

Hello,

China's BRI project is being questioned all over the world.
 What will be the the impact of COVID-19 on this project because we know that this pandemic is not only a health crisis but an economic crisis too.
   On a brief note,this BRI project of china is a global development strategy of china to increase the trade of china globally and to enhance its financial growth further.This initiative was started in 2013,India called it string of pearls policy.
  There are over 70 countries involved in this project.The main aim of this project is to increase the connectivity of Asia with Europe and Africa.
   A devastating economic collapse of potentially historic proportions after COVID-19,leading to social and political turmoil in a number of countries and curtained connectivity.
      The pandemic has exposed the risks and weakness of global interconnectedness,which will affect China's BRI.
  Due to the pandemic,China's growth rate is decreased to 6.1% in 2019 which is its 30 year low and due to this ,there is a major risk of Debt crisis on the Belt and Road because BRI is primarily powered by China.
   China suffers a massive jobloss of 5 million people in the first 2 months of 2020 and is believed to reach the no. of 9 million by the end of this year.
China has had kept the target in 2010  that it will double its GDP by the end of 2020.But,this seems not to be possible due to ongoing COVID-19 crisis.
   Now,China get trapped in two situations for which it have to chose  out:-

1.) avoiding the middle income trap

2.) or at the same time posturing as a         superpower

In this situation,BRI may not only be short of cash,but it will also be hard to sell at home.
    Case of Bankruptcy will get increasd on the affiliate countries of this project.African countries,which are the main market of china,is in a very vulnerable condition.
   
China has officially stated that loss making companies of china will get bank loans through the chinese governmment bank.
  But,it does not mean that CDB will give loans to all banks.At first,it will verify the companies which are in a strong positions,shortlist it and then give them loans.

     Chinese president Xi Jinping has made a worldview and a priority list as given below:-

   1.) Preserving the CCP's power
   2.) Maintaining national unity
   3.) the expansion of economy
   4.) enviromental sustainibility
   5.) modernize the chinese military
   6.) China's 14 neigbouring states
   7.)  weaken America's longstanding security alliances
》8.) terrestrial silk road economic belt
》9.) Maritime silk road
   10.) reshape the global order

   Since,no.8 and 9 are a part of BRP and is in the lower position in the jinping's list.So,under extreme circumstances, Beijing will not consider the BRP as important.
    In particular,BRP projects will not get stopped but will evolve in a new way. But,yes there will be a lot trouble in rebuilding this project.
   In long term,a changed BRI will emerge with a changed strategy.

      So,this was my complete analysis on this article.
     Hope you will like this post.For more such posts, stay updated with the blog.

   Thank you

     Jai Hind