New Delhi, Nov 2 China’s Belt and Road Initiative (BRI) which has grown into a multi-trillion-dollar geopolitical campaign to spread the footprint of the Asian giant has started to run into headwinds due to Beijing’s internal economic struggles and shifting global dynamics, according to a report in Australia’s Daily Mirror.
The current era of Chinese economic slowdown is increasing risks throughout the BRI. China’s domestic growth is faltering is weakening lending for most BRI projects. Many recipient countries are facing rising global interest rates and weaker commodity prices, sharply increasing debt-servicing costs and forcing governments into unpopular austerity or IMF bailouts. This increases China’s exposure to dozens of high-risk credit portfolios.
China’s narrative that BRI brings prosperity and partnership is also facing a backlash in target countries as projects have repeatedly stalled or been cancelled due to local protests, scandals, and environmental destruction, ranging from the halted Myitsone dam in Myanmar to high-profile opposition in Malaysia and Panama.
Mounting accusations over corruption, opaque governance, and disregard for local consent have undermined China’s image as a responsible development partner. Even where deals go ahead, many are collateralised by sovereign guarantees or future resource exports, making vulnerable countries dangerously dependent on Chinese lenders, the report states.
The report points out that countries such as Sri Lanka and Zambia exemplify the potential fallout, having faced debt crises that have worsened due to Chinese loans. Sri Lanka’s handing over of the Hambantota port to China on a 99-year lease after debt default highlights the social and political risks inherent in China’s debt-led diplomacy under the BRI framework.
Several indicators forecast a tapering of large-scale investment deals in the second half of 2025. International assessments highlight that although deal volumes remain robust, the scale of megaprojects and the overall magnitude of new commitments are expected to decline due to Beijing’s reassessment of fiscal priorities in light of domestic economic growth concerns.
Despite the BRI narrative of investments in renewable energy and “green” sectors, a large portion of new deals still involve fossil-fuel projects and high-carbon industry, complicating China’s ambition of reconciling economic growth with environmental commitments, the report added.
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