US senators demand study on impact of China's BRI on troubled economies

A group of US senators on Friday urged the President Donald Trump-led administration to study the impact of the China-funded Belt and Road Initiative on the finances of troubled economies.

China's massive Belt and Road Initiative (BRI) seeks to build rail, maritime and road links from Asia to Europe and Africa in a revival of the ancient Silk Road trading routes.

"We urge the State Department and the Treasury to consider the impact of the Chinese-financed Belt and Road Initiative on the finances of many troubled economies and policy implications of additional International Monetary Fund (IMF) or World Bank support," the senators wrote in a letter to Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin.

The issues related to BRI, earlier known as One Belt One Road (OBOR), has been a major bone of contention between India and China as one portion of the corridor passes through Pakistan-occupied Kashmir.

"Domestic economic constraints in China stemming from COVID-19 will likely make China less willing to roll over debts as they mature, which could exacerbate emerging-market liquidity challenges. As projects struggle in areas of strategic interest, China will be tempted to safeguard its investments and political influence, the senators wrote.

Already, the COVID-19 crisis has led BRI recipients like Pakistan, Serbia and Ethiopia to publicly praise China in exchange for much-needed medical assistance as China promotes its Health Silk Road component of BRI, the lawmakers said.

However, praise will unlikely be enough for debt forgiveness."