While the International Monetary Fund has backed China’s One Belt and Road infrastructure plan, it has warned President Xi Jinping to be wary of debt.
Managing Director of the International Monetary Fund (IMF) Christine Lagarde has spoken of the progress China is making with its One Belt One Road (OBOR) initiative, while warning China not to saddle countries with un-payable debt.
President Xi Jinping of China’s OBOR plan is a trillion dollar initiative aimed at constructing ports, rail, road and infrastructure across the historic ‘Maritime Silk Road’.
The Maritime Silk Road stretches from Eastern China, above India, through the northern Middle East and into Western Europe.
Such a massive undertaking by China is apparently done to better ties between countries by facilitating faster trade, however critics say it is China monopolizing the global supply chain.
Whole the project is heavily underway, the IMF has warned China to not burden countries along the silk-road with debt.
“The first challenge is ensuring that Belt and Road only travels where it is needed,” Lagarde said.
“With any large-scale spending there is sometimes the temptation to take advantage of the project selection and bidding process.
“Experiences from across the globe show that there is always a risk of potentially failed projects and the misuse of funds.”
President Xi is reported to see the massive project as part of his political legacy, exhibiting the power and expansion of China.
Xi has pushed the initiative as a way to foster development and economic integration.