BEIJING (AFP) – Chinese President Xi Jinping sought Friday to bat away concerns about his ambitious Belt and Road Initiative, saying his global infrastructure project will have “zero tolerance” for corruption while vowing to prevent debt risks.

In a speech kicking off a BRI summit, Xi also offered soothing remarks to the US over subsidies, the yuan and trade as the two sides head into fresh high-level talks next week.

Xi’s signature foreign policy aims to reinvent the ancient Silk Road to connect Asia to Europe and Africa through massive investments in maritime, road and rail projects — with hundreds of billions of dollars in financing from Chinese banks.

It offers to bring much-needed modern infrastructure to developing countries, but critics say it is riddled with opaque deals favouring Chinese companies while saddling nations with debt and environmental damage.

“Everything should be done in a transparent way and we should have zero tolerance for corruption,” Xi said at the gathering of 37 world leaders which ends Saturday.

Chinese President hosted 37 world leaders at the BRI Forum in Beijing on April 26, 2019. Photo: Infofoto

China has also rejected accusations that Belt and Road is a “debt trap” and a geopolitical tool for Beijing’s ambitions of becoming a global superpower.

“The Belt and Road is not an exclusive club,” Xi said.

In a nod to the concerns over loans, he called for the “commercial and fiscal sustainability of all projects” so they achieve their intended goals.

According to a draft of the final communique obtained by AFP, the leaders will encourage multilateral development banks and other international financial institutions to support projects “in fiscally sustainable ways” and mobilise private capital in line with local needs.

“We emphasise the importance of economic, social, fiscal, financial and environmental sustainability of projects,” the draft says.

International Monetary Fund chief Christine Lagarde welcomed China’s plans to create a debt “sustainability framework”.

Calling for a “BRI 2.0”, Lagarde said in a speech the scheme needs “increased transparency, open procurement with competitive bidding, and better risk assessment in project selection.”

Pakistani Prime Minister Imran Khan, who said his country was an “enthusiastic” supporter of Belt and Road,┬ácalled for the creation of an office for anti-corruption cooperation.

The two countries are building the China-Pakistan Economic Corridor (CPEC), a multi-billion-dollar project linking China’s northwest to the Arabian sea port of Gwadar.

Eric Olander, managing editor of the non-partisan China Africa Project website, said there is no data to back up claims that BRI worsens debt problems, but US criticism has had an impact.

“I think the president wants to change that narrative so he can rebrand and reposition BRI away from the debt issue and more towards China’s development story that he wants to tell,” Olander told AFP.

Trade wars

Khan, Russian President Vladimir Putin and Italian Prime Minister Giuseppe Conte, whose country became the first G7 member to sign up to Belt and Road, are among the leaders attending the summit.

EU powers France and Germany, which have taken a careful stance about BRI, sent cabinet members, with French Foreign Minister Jean-Yves Le Drian saying the Silk Road must be “a two-way street”.

Putin called for a global response against protectionism, unilateral sanctions and “trade wars” — veiled criticisms of the United States.

Washington, which sent a senior White House official to the first BRI summit in 2017, has not dispatched any officials.

US officials have dismissed BRI as a “vanity project” and rebuked Rome for signing up to the scheme.

With US negotiators heading to China for a new round of trade talks next week, Xi repeated a pledge to increase imports and vowed to abolish “unjustified” subsidies to Chinese firms — both key US demands.

Debt fears

Since Xi launched BRI in 2013, China has invested $90 billion in projects while banks have provided up to $300 billion in loans, according to Chinese officials.

Examples of debt trouble abound.

Sri Lanka turned over a deep-sea port to China for 99 years after it was unable to repay loans. Pakistan needs an international bailout.

Pushing back has proved a successful election issue in Sri Lanka, the Maldives and Malaysia, as the Chinese project was used to whip up fears about eroding sovereignty.

After his electoral victory last May, Malaysian Prime Minister Mahathir Mohamad cancelled some planned works and renegotiated a rail project cutting 30 percent off the price tag.

But Mahathir said at the summit that “the Belt and Road idea is great” and he “fully” supports it.