B&R News: Chinese building projects narrowing economic gaps
11 Sep 2018


Chinese-financed railways and other projects in Africa and Asia are helping to reduce economic inequality between regions in the countries where they are built, a group of multinational researchers said Tuesday.


China's "Belt and Road" initiative has prompted complaints about debt and unease about Beijing's ambitions among governments from the United States to Russia to India. But a study led by AidData at the College of William & Mary in Virginia strikes a positive note.


The study of 3,485 projects in 138 nations across Asia, Africa, Latin America and the Middle East in 2000-14 found they led to a more equal distribution of economic activity by improving access to jobs and markets.


"People's livelihoods and economic development have been boosted," said a Cabinet official, Ning Jizhe, at an Aug. 28 news conference. "No 'debt trap' has been created."


Other governments worry Beijing is trying to gain strategic influence by creating a trading and financial network centered on China, the world's second-largest economy.


AidData's first report in 2013 focused on Chinese financing to Africa. The group includes researchers from Harvard University, Germany's Heidelberg University and other schools and research institutes.


They reported last year China was close to matching the scale of U.S. grants and loans to developing countries. But they said Beijing's financing served its own economic interests and provided little benefit to recipients.


"Belt and Road" was formally launched in 2012 but also includes Chinese-financed projects begun before that.


For their latest report, researchers made a list of projects from news reports, government statements and research by academics and non-government organizations.


Some 43 percent were infrastructure such as roads, railway, bridges, ports, airports, power grids, cellphone towers and fiber optic cable lines. Another 42 percent were services including hospitals, schools and sewers.


To measure economic impact, the researchers looked at changes in nighttime use of lights across cities and rural areas. That was based on satellite images from the U.S. National Oceanic and Atmospheric Administration.


Those changes "correlate strongly with traditional measures of welfare down to the village level," the report said.


Projects financed by Beijing might produce a bigger payoff because Chinese companies work faster and often complete projects within months, while traditional Western-backed projects can require years, Parks said.


Also, they often focus on linking inland areas with ports, which increases export revenue, in contrast to traditional projects that connect areas within the same country, he said.


Source: Associated Press