China’s investment in its Belt and Road Initiative (BRI) has dropped more than 50% since the Covid-19 virus was identified in Wuhan early last year. However, funding into green BRI projects seems set for a significant boost.
Chinese investment in its 138 BRI partners dipped 54% from 2019 to 2020 to $47 billion overall, according to the China BRI Investment Report 2020, by the Central University of Finance and Economics in Beijing.
The financial data was recently released by China’s Finance Ministry and shows China’s BRI investment from January to November 2020.
Chinese investment into BRI projects was substantially lower than its peak in 2015 ($78 billion) and was the lowest since the Belt and Road’s inception in 2013.
The bulk of the total investment remained in Asia (54%) and Africa (27%). European investment declined by around 36%, while Middle Eastern and Sub-Saharan African investment was impacted the most last year, falling 69% and 66%.
Director of the Green Belt and Road Initiative Center and a senior research fellow at Central University of Finance and Economics in Beijing, Dr Cristoph Nedowil Wang, said the contracting global economy will see an increase in investment into smaller, more bankable projects, especially in renewables.
According to the report, which Dr Wang authored, the majority of China’s energy investment was dedicated to clean energy – a first for the Asian giant. China’s share of hydro, solar, and wind energy made up 57% of its energy infrastructure investment in 2020 – a 38% increase.
China’s coal investment continues to fall from 2015 but saw a resurgence in 2020 increasing from 15% to 27%.
Not every country saw diminished Chinese investment. Pakistan, Vietnam, Chile, Indonesia, Zambia, and Zimbabwe all received more attention last year despite the global slowdown.
In November last year, Meng Wei, a spokesperson for the National Development and Reform Commission, reaffirmed China’s commitment to the BRI but outlined a new vision of the project – where three aspects would be emphasised – digital, health, and green Silk Roads.
The pandemic has increased some countries’ desire to go green. Egypt, Pakistan, Vietnam, and Bangladesh have all expressed interest in reviewing their economic targets and introducing more environmentally friendly recovery plans and aligning themselves with the UN’s Sustainable Development Goals, according to the Financial Times.
https://oxfordbusinessgroup.com/news/has-covid-19-prompted-belt-and-road-initiative-go-green
https://www.ft.com/content/8ec30baf-69e9-4d73-aa25-13668dcb659f
