Covid-19 slows Belt and Road push

Chinese workers cannot get to overseas projects, and factories are cut off from the Chinese imports they need to keep running.

21 February 2020 | Economics

Our project has been dogged by delays and controversy. – Senior executive (anonymous): Indonesia

Keith Zhai and Matthew Tostevin - When president Xi Jinping made his first state visit this year to Myanmar and signed new infrastructure contracts, there was no indication of the obstacle about to trip up China's plan for railways, ports and highways around the world: the coronavirus.

Travel restrictions to prevent the spread of the disease, which has now killed more than 1 800 people, have idled much of the world's second-largest economy and choked key elements of Xi's signature Belt and Road Initiative (BRI).

Chinese workers cannot get to overseas projects, and factories are cut off from the Chinese imports they need to keep running, according to more than a dozen company executives and officials.

"Many factories in China remain closed; those that are open cannot reach full capacity," said Boyang Xue, a China analyst at Ducker Frontier.

"Since many BRI projects tend to source equipment and machinery from manufacturers based in China, the disruptions in industrial production and supply chain will cause further delays."

Indonesia

One giant project, China Railway International Group's US$6 billion high-speed railway in Indonesia, is on a war footing.

The state enterprise has set up a task force to monitor the coronavirus' spread and urged all Chinese employees who went home for the Lunar New Year holiday not to return to Indonesia, a senior executive with the company said on condition of anonymity, as he was not authorised to speak to the media.

The company has stopped more than 100 Chinese personnel, mostly skilled workers or managers, from returning to the project linking Indonesia's capital Jakarta with the textile hub of Bandung, about 140 km away, the executive said.

"We have to focus on less-critical parts of the railway project until some of our key people come back to work," he said. "We're getting off to a very bad start in 2020. Our project has been dogged by delays and controversy, and this coronavirus brought us bigger challenges."

Disruption

China's top regulator of state-run companies said in a Tuesday briefing that the outbreak has caused "difficulties" on some overseas projects and investments.

The country "has already communicated with overseas companies, overseas owners, and governments as early as possible to gain support and understanding," said Peng Qinghua, secretary general of the State-owned Assets Supervision and Administration Commission.

Several Chinese companies in Indonesia, including Tsingshan Holding Group, GEM Co Ltd and Zhejiang Huayou Cobalt saw nickel and cobalt projects disrupted as Southeast Asia's biggest economy stopped flights from China in early February and denied entry to people who had been in mainland China in the previous 14 days.

"The new projects may be postponed a little, but not that much," said an executive at one of the companies, who had planned to travel to Indonesia before the travel ban made it impossible.

More than 133 countries have imposed entry restrictions on Chinese citizens or people who have visited China, according to the Chinese National Immigration Agency.

Pakistan's US$62 billion China-Pakistan Economic Corridor (CPEC) said the coronavirus was not having an impact, although officials said some managers had been quarantined after returning from China.

The challenge of the SARS-CoV-2 coronavirus to Belt and Road contracts follows a pushback in 2018, when officials in Indonesia, Malaysia, Sri Lanka and elsewhere criticised projects there as costly and unnecessary.

China scaled back some plans after several countries sought to review, cancel or scale down commitments, citing concerns over costs, erosion of sovereignty, and corruption.

Broken supply chain

The coronavirus has also started to disrupt the supply chains that give companies access to key machinery and components.

The offices of Chinese senior managers stand empty at the Cambodia Sihanoukville Special Economic Zone, which describes itself as a "landmark project" on the Belt and Road Initiative and is home to more than 160 businesses and over 20 000 workers.

Employees from Chinese-run factories told Reuters that most of the workers there were local, but that the greater challenge was their dependence on supplies from China.

That "could elongate project timelines, for example, which might raise costs," said Nick Marro, global trade lead at the Economic Intelligence Unit and a China analyst.

And although that might only affect operations in the first quarter - depending on whether the virus is contained – slower Chinese growth will have a regional and global impact, he said.

In some places on the Belt and Road, the impact of the coronavirus has already arrived.

Bangladesh has announced delays to several infrastructure projects, including commissioning of the Payra coal power plant, which was supposed to begin commercial operations in early February.

Well over 2 000 Chinese workers work on the plant and some 40% of them went home for the Lunar New Year holiday, local media reported. Twenty were allowed back to work on Monday after 14 days in quarantine. – Nampa/Reuters

Similar News

 

2 000 companies, 16 000 workers

1 day - 14 July 2020 | Economics

OGONE TLHAGEWINDHOEKAbout 2 000 employers and 16 000 workers have so far applied to the Social Security Commission (SSC) for assistance, as Covid-19 salary cuts...

Zimbabwe to review lockdown measures

1 day - 14 July 2020 | Economics

Zimbabwean president Emmerson Mnangagwa warned that the nationwide Covid-19-induced lockdown could be further tightened due to a spike in new infections.Mnangagwa declared a total Covid-19...

Millions for development in Oshana

2 days ago - 13 July 2020 | Economics

OSHAKATI – The Oshana region was allocated a development budget of nearly N$243.8 million for the 2020/21 financial year.Upgrading and renovation of education infrastructure due...

IEA sees oil output recovery

2 days ago - 13 July 2020 | Economics

Paris - Oil output hit a nine-year low last month as producers reacted to the plunge in demand triggered by the coronavirus crisis, the IEA...

Ghanaian govt sued to save forest from mine

5 days ago - 10 July 2020 | Economics

Kwasi Gyamfi Asiedu – Environmental activists have sued Ghana's government to stop a proposed mining project in a protected national forest, which they say endangers...

New water infrastructure at Sorris-Sorris

6 days ago - 09 July 2020 | Economics

Farmers at Plaas Rooidak in the Sorris- Sorris communal conservancy have finally received potable water infrastructure after enduring 10 years without their own water source.Conservancy...

Namibia receives 2.35 million USD worth of support

6 days ago - 09 July 2020 | Economics

China has donated Covid-19 related supplies worth 40 million Namibian dollars (2.35 million US dollars) to Namibia to assist the country in fighting the virus,...

Khorixas town council to prioritise

1 week ago - 08 July 2020 | Economics

The Khorixas town council plans to spend its development budget of N$13 860 000 for the 2020/21 financial year on priority areas such as servicing...

Food security crucial in a selfish world

1 week ago - 08 July 2020 | Economics

The world has entered an era of “every country for itself”, leaving Namibia with no choice but to pursue policies that are aimed towards food...

Africa’s battle against 'zombie' appliances

1 week ago - 08 July 2020 | Economics

Peyton Fleming - On Nigeria's bustling streets, stalls selling stacks of well-worn, energy-sucking refrigerators and air conditioners are known as "tokunbo", a Yoruba word that...

Latest News

War vets furious over housing...

8 hours ago | Infrastructure

ILENI NANDJATOONESIPeople's Liberation Army of Namibia (PLAN) pioneer war veterans - most of whom are still living in poverty and squalor - say they are...

Officials 'sabotaging' Swapo-led government

8 hours ago | Government

KENYA KAMBOWERUNDUNational Council audit committee chairperson Lebbeus Tobias has described the neglect of borders and challenges faced by border staff as “sabotage” of the Swapo-led...

Accord war vets the necessary...

8 hours ago | Opinion

War veterans who complained in today's edition of Namibian Sun that government is delaying their so-called 'tokens of appreciation' such as houses and start-up capital...

Fishing company delivers on promise

8 hours ago | Social Issues

KENYA KAMBOWEKASOTEA fishing company has delivered on its promise to build a home for a poverty-stricken family of seven at Kasote village in Kavango West.Two...

Wife killer's brutality 'unsurpassed'

8 hours ago | Justice

JANA-MARI SMITHWINDHOEKHigh Court Judge Naomi Shivute has described Andries Hermanus Johannes Scott's brutal trampling to death of his wife, Anna Scott, in August 2017 as...

Hefty fines for pangolin smuggling

8 hours ago | Crime

ELLANIE SMITWINDHOEKTwo new cases of wildlife crime were reported last week and three suspects were arrested, while two men found guilty of the illegal possession...

Half of Namibians can't afford...

8 hours ago | Disasters

ELLANIE SMITWINDHOEKThe number of hungry people in Namibia has increased by 100 000 in over a decade, according to a United Nations report. However, there...

Corona relief from Agribank

8 hours ago | Agriculture

ELLANIE SMITWINDHOEK Agribank recently kicked off its countrywide stakeholder information workshops on its coronavirus relief stimulus package. The bank introduced the stimulus package on...

WorldSkills Namibia celebrates World Youth...

8 hours ago | Education

ELIZABETH JOSEPHWINDHOEKNamibia today joins the rest of the world in marking World Youth Skills Day, an annual event which recognises the importance of equipping young...

Load More