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00:00I'm Andy Brown the editorial director of the Bloomberg New Economy The Belt and Road Initiative is Chinese President Xi Jinping is visionary plan to Connect Asia and Europe with trading transport and industrial infrastructure in the West . The Belt and Road initiative gets a terrible press is that criticism fair. Well let's look at the five big myths of the belt & road myth number one it's a debt trap. This is pretty unfair. The idea here is that China plies poor countries with unsupportable debt and when they can't repay the loans it then grabs physical infrastructure. Actually it's only been one clear cut example of this in Sri Lanka where the Chinese helped to build a port which turned into a commercial flop and then the Sri Lankan government was obliged to hand over the port to a Chinese state company. But that was an exception not the rule. Having said that China doesn't seem to have much regard for risk scattering its loans around to countries that are already heavily indebted like Pakistan Mongolia and Djibouti. Myth number two belt & road is China's Marshall Plan. Actually this gets everything backwards. The enduring legacy of the Marshall Plan was that it inculcated free market ideas in Europe and habits of cooperation among former enemies that underpinned democracy. To the extent that belt & Road is about China's attempts to spread its own value including state capitalism and authoritarian governance in that sense belt & road is the exact opposite of the Marshall Plan. Myth number three belt & road is China's grand strategy . As a matter of fact Belt and Road is a sprawling project it's haphazard it's chaotic. It's all about multiple actors jumping aboard a state funded investment free for all. They have multiple different agendas. Some of them conflicting . Certainly it has a geopolitical aim which is to draw China's neighbors more closely into its own economic orbit. But this doesn't add up to a grand strategy. Myth number four China has unlimited amounts of money to pour into belt & road. Not true . Over time it's quite likely that lending will exceed a trillion dollars but won't come anywhere near the 8 trillion dollars that some people report. What is the case is that Chinese spending is likely to be far less than the trillions of dollars that the United States squandered on fruitless wars in Asia and the Middle East over the past several decades. That's why the US can snipe at belt & road but it doesn't have the financial resources to match it. Myth number five it's all about the yuan internationalization. The idea here is that China is going to use belt & road to spread use of its own currency and challenge the mighty dollar. Well the dollar is safe. It turns out that a majority of belt & road contracts are signed in dollars not yuan. And actually as China's access to dollars dwindles because its current account surpluses are narrowing it's going to have less and less money to invest in belt & road projects in the future .

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Five Big Myths of China's Belt and Road Initiative

Andy Browne, Editorial Director of the Bloomberg New Economy, explains what he thinks are the five big myths of China's Belt and Road initiative. (Source: Bloomberg)

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