According to observers, China has pledged 780 billion yuan (US$106.6 billion) in new financing for its Belt and Road Initiative, a modest figure compared to previous years but with the potential to deliver more bang for the buck as Beijing pivots its signature global infrastructure strategy towards "small yet smart" projects.
President Xi Jinping said last week at the Belt and Road Forum for International Cooperation in Beijing that China will provide 350 billion yuan to the China Development Bank and a comparable amount to the Export-Import Bank of China. The nation will contribute another 80 billion yuan to the Silk Road Fund.
He said that the cash will be used to assist Belt and Road Initiative projects "on the basis of market and business operation."
According to Linda Calabrese, research fellow and development economist at the Overseas Development Institute in London, the new financial commitments were modest in comparison to previous spending and aligned with the narrative of "small but beautiful" or "small yet impactful" projects that had driven recent belt and road discussions.
"Small yet smart" and "small but beautiful" have evolved as belt-and-road buzzwords to characterize smaller, more focused projects supported with fewer loans.
Examples include solar power plants to serve places not served by the current electricity grid and highways to connect rural locations to the rest of the world. They contrast with the huge road and rail projects seen in the early days of the Belt and Road Initiative, which have grown more difficult to fund due to sovereign debt concerns and rising risk.
