Ahead of its planned second forum to promote the Belt and Road Initiative (BRI), China has announced plans to seek global partners to join the project that drew criticism over its predatory loans leaving smaller countries in huge debt.

China will be holding the second Belt and Road Forum (BRF) in April, which Chinese Foreign Minister Wang Yi stated would be bigger than the one held in 2017.

India boycotted the first BRF meeting over its objections that the BRI flagship project, the China-Pakistan Economic Corridor (CPEC), traversed through Pakistan-occupied Kashmir.

The second BRF meeting, in which China plans to rope in several heads of state and government around the world including Italy, is being held amid growing criticism from several countries, such as the US and India, that the massive loans being doled out for different projects, especially in smaller countries over and above their capacity to pay, has resulted in long-term indebtedness.

It is also being held at a time when the Chinese economy is showing signs of slowdown, resulting in the government tightening its expenditure, especially investment finance.

Chinese Premier Li Keqiang, who had lowered the GDP target to 6 per cent from 6.5 per cent for this year, had said that the government at all levels would have to make bold and courageous sacrifices, “turning the blade inward” and “cutting our own wrists”.

“The China Investment Corporation (CIC), the country’s $940 billion sovereign wealth investment fund, is seeking global partners to jointly establish a special cross-border investment instrument which will further finance the Belt and Road projects,” said CIC president Tu Guangshao.

“We call it the Belt and Road cooperation fund,” Tu told the state-run China Daily.

Tu said that a cooperation fund usually selects projects and makes investment decisions based on the common interests of all shareholders.

US joint chiefs of staff chairman Gen Joseph Dunford told a Senate Armed Services Committee that Pakistan owes its “all weather friend” China at least $10 billion debt for the construction of Gwadar port and other projects.

“Saddled with predatory Chinese loans, Sri Lanka granted China a 99-year lease and 70 per cent stake in its deep-water (Hambantota) port,” Dunford said.

The Maldives owes China roughly $1.5 billion in debt - about 30 per cent of its GDP - for construction costs, he said.

In Africa, Djibouti owes China over 80 per cent of its GDP and in 2017, the country became host to China’s first overseas military base.

“China is diligently building an international network of coercion through predatory economics to expand its sphere of influence,” Gen Dunford said, adding that nations are discovering the hard way that China’s economic “friendship” via BRI can come at “a steep cost”.

The US is openly warning other countries to be cautious before getting involved in BRI projects, but governments from Kuala Lumpur to Islamabad are scaling back their commitment because of debt concerns.

The main criticism stems from China doling out huge loans spanning to billions of dollars to small countries for infrastructure development over and beyond their capacity to pay back.

However, Tu refuted the criticism saying that “plenty of facts are proof that the BRI is not a debt trap that some countries may fall into, but an economic pie that benefits local populations. It is not a geopolitical tool but a great opportunity for shared development”.