A series of "setbacks" in countries like Sri Lanka, Pakistan and Malaysia have forced China to "modify" President Xi Jinping's ambitious Belt and Road Initiative, billionaire investor George Soros has said.
Unveiled by President Xi in 2013, the Belt and Road Initiative (BRI), aims to bolster Beijing's influence across the world with a huge network of land and sea links with Central and Southeast Asia, the Middle East, Europe and Africa.
Speaking at a private dinner event at the World Economic Forum (WEF) here on Thursday, Soros said President Xi's BRI has been in operation long enough to reveal its deficiencies.
Soros noted that the BRI was designed to promote the interests of China, not the interests of the recipient countries; its ambitious infrastructure projects were mainly financed by loans, not by grants, and foreign officials were often bribed to accept them.
"Many of these projects proved to be uneconomic," the 88-year-old Hungarian-American businessman said.
"The iconic case is in Sri Lanka. China built a port that serves its strategic interests. It failed to attract sufficient commercial traffic to service the debt and enabled China to take possession of the port," Soros said, referring to the Hambantota port, which was leased to Beijing on a 99-year lease in 2017 because Colombo could not repay the Chinese loans it took out to build the port.
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"There are several similar cases elsewhere and they're causing widespread resentment," he said.
He noted that Malaysia was leading the pushback.
"The previous government headed by Najib Razak sold out to China but in May 2018 Razak was voted out of office by a coalition led by Mahathir Mohamed. Mahathir immediately stopped several big infrastructure projects and is currently negotiating with China how much compensation Malaysia will still have to pay," Soros said.
The situation is not as clear-cut in Pakistan, which has been the largest recipient of Chinese investments, he said.
The USD 60 billion ChinaPakistan Economic Corridor (CPEC) that will run throughout Pakistan is the flagship project under the BRI.
"The Pakistani army is fully beholden to China but the position of Imran Khan who became prime minister last August is more ambivalent. At the beginning of 2018, China and Pakistan announced grandiose plans in military cooperation. By the end of the year, Pakistan was in a deep financial crisis," Soros noted.
India is opposed to the CPEC as it passes through Pakistan occupied Kashmir, which India has seen as a violation to its sovereignty. New Delhi has also not joined the BRI and has expressed strong reservation on the funding pattern and objectives of the plan.
China rejected the allegation that the BRI was a form of the Marshall Plan or any kind of geostrategic concept. Instead, China insists it is purely about trade.
Beijing also claims that people's livelihoods and economic development in host countries have been boosted by the BRI.
Soros said one thing has became evident that China intends to use the BRI for military purposes as well.
"All these setbacks have forced Xi Jinping to modify his attitude toward the BRI," he told the audience at the WEF.
He noted that customers are now forewarned and several of them, ranging from Sierra Leone to Ecuador, are questioning or renegotiating projects.
Soros said the US declaring China a 'strategic rival' was too simplistic. "China is an important global actor. An effective policy towards China cannot be reduced to a slogan", he added.
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