Bold strategy or irrational exuberance - Can China’s fiscal foundations support the Belt and Road Initiative?
- Christine Wong, Professor of Chinese Studies and Director of the Centre of Contemporary Chinese Studies at the University of Melbourne
- 14 March 2018
- P.N. van Eyckhof 1
The Belt and Road Initiative (BRI) is a project of breathtaking scale that aims to reshape economic geography to enhance China’s centrality in the world. Estimates for the costs of infrastructure to create a sea and land network linking more than 60 countries from Asia to Europe run upwards of 6 trillion US dollars. China has to date committed several hundred billion yuan and created financial institutions to carry out the Belt and Road vision, including the Asian Infrastructure Investment Bank and the Silk Road Fund, alongside the China Development Bank, Export-Import Bank, and state-owned commercial banks.
Does China have the financial wherewithal to implement this grand scheme?
This seminar examines China’s recent development and places the BRI in the long arc of fiscal expansion since the turn of the century, when a long run of double-digit growth brought buoyant revenues that fuelled a proliferation of new programs, each one bigger and more ambitious. The BRI was likewise conceived in that golden era of high economic growth, rising export surpluses and high foreign reserve accumulation. Can China afford the BRI at 6% annual growth? Will China’s fiscal institutions be robust enough to manage the transition and avoid overextending its finances under the BRI?
About the Speaker
Christine Wong is Professor of Chinese Studies and Director of the Centre for Contemporary Chinese Studies at the University of Melbourne. Prior to this, she was Professor and Director of Chinese Studies at the University of Oxford, where she was a Fellow at Lady Margaret Hall. Professor Wong’s research focuses on China’s public finance and public sector reform, including implications for governance, economic development and welfare. Over the past 20 years she has worked extensively with the World Bank, the OECD, and the Asian Development Bank, as well the IMF, UNDP, UNICEF, and the UK Department for International Development. She is a member of the OECD Advisory Panel on Budgeting and Public Expenditures.
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