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China’s ambitious modern Silk Road initiative hits political, financial hurdles

From Pakistan to Tanzania to Hungary, Chinese President Xi Jinping’s ambitious modern Silk Road initiative hits political, financial hurdles

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China’s plan for a modern Silk Road of railways, ports and other facilities linking Asia with Europe hit a $14 billion pothole in Pakistan. Pakistan’s relations with Beijing are so close that officials call China their “Iron Brother”.

Despite that, plans for the Diamer-Bhasha Dam were thrown into turmoil in November when the chairman of Pakistan’s water authority said Beijing wanted an ownership stake in the hydropower project. He rejected that as against Pakistani interests.

China issued a denial but the official withdrew the dam from among dozens of projects being jointly developed by the two countries.

From Pakistan to Tanzania to Hungary, projects under President Xi Jinping’s signature “Belt and Road Initiative” are being cancelled, renegotiated or delayed due to disputes about costs or complaints host countries get too little out of projects built by Chinese companies and financed by loans from Beijing that must be repaid.

“Pakistan is one of the countries that is in China’s hip pocket, and for Pakistan to stand up and say, `I’m not going to do this with you,’ shows it’s not as `win-win’ as China says it is,” said Robert Koepp, an analyst in Hong Kong for the Economist Corporate Network, a research firm.

Even Pakistan, one of China’s friendliest neighbours, has failed to agree on key projects.

The two governments are developing facilities with a total cost of $60 billion including power plants and railways to link China’s far west with the Chinese-built port of Gwadar on the Indian Ocean.

A visit by a Chinese assistant foreign minister in November produced no agreement on railway projects in the southern city of Karachi valued at $10 billion and a $260 million airport for Gwadar.

The same month, the chairman of the Pakistan Water and Power Development Authority announced the Diamer-Bhasha Dam would be withdrawn from joint development.

“Chinese conditions for financing the Diamer-Bhasha Dam were not doable and against our interests,” the official, Muzammil Hussain, told legislators, according to Pakistani news reports.

The Chinese Cabinet agency overseeing “Belt and Road”, the National Development and Reform Commission, denied in a written statement that it asked for an ownership stake.

China’s new Silk Road hits political, financial hurdles | Bangkok Post: news

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