To lessen the impact of the 2007–2008 Global Economic Crisis, Chinese leaders invested large amounts of capital to build its domestic infrastructure and production capacity. Having saturated the market and created production overcapacity, General Secretary Xi Jinping readjusted the strategy in 2013 by promoting the Belt and Road Initiative (BRI). Xi sent Chinese delegations around the world who offered financial loans, engineering expertise, and skilled labor to fulfill the dreams of local politicians and businesspeople by constructing large infrastructure projects. China subsequently lent over $1 trillion to build 3,000 BRI projects, ranging from high-speed rail in Indonesia, a highway linking Montenegro and Serbia, and port facilities in Pakistan and Sri Lanka. China thus developed strong economic connections around the world, which secured markets for Chinese export goods to relieve Chinese domestic overcapacity and strategic materials to fuel China’s production juggernaut. However, Chinese banks failed to evaluate these megaprojects, many of which had already been rejected by the “old era” multilateral aid programs such as the World Bank as financially unfeasible. BRI recipients were unable to meet their loan repayment schedules and requested loan adjustments and even loan forgiveness. Thus, in November 2021, Xi Jinping implemented an interim policy readjustment to scale down or halt BRI planned projects and to focus on “small yet smart” projects.
