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Donald Low highlights concerns over China’s experience in financing for Belt and Road Initiative projects

Professor Donald Low, a Senior Lecturer at HKUST, initially doubted the Belt and Road Initiative (BRI), validated by recent Chinese lending cutbacks and internal criticisms.

Referencing Kahneman’s behavioral principles, he underscored unwarranted optimism among BRI participants. Adjusting for China’s limited financing experience, he suggested BRI projects might underperform compared to World Bank-financed ventures.



Professor Donald Low, a Senior Lecturer and Professor of Practice in Public Policy at the Hong Kong University of Science and Technology (HKUST), voiced scepticism about the Belt and Road Initiative (BRI) during its launch a decade ago.

In a recent Facebook post, discussing China’s BRI, he disclosed his past scepticism, foreseeing that due to China’s relatively limited experience in development financing, BRI projects might, on average, yield inferior performance compared to those financed by the World Bank.

On Tuesday (17 Oct), China inaugurated a summit commemorating the 10th anniversary of the Belt and Road Initiative (BRI). Notable world leaders, including Russia’s Vladimir Putin, have convened in Beijing for this high-profile event, taking place amidst an escalating Israel-Hamas conflict.

The BRI represents a significant foreign-policy endeavour initiated by China, with the aim of funding infrastructure projects throughout Eurasia and Africa.

While it has facilitated development and investment in numerous countries, concerns have arisen regarding its potential reinforcement of autocratic regimes and its challenge to the prevailing global order dominated by the West.

An article titled “How China’s Belt and Road Initiative is changing,” published in the Economist, highlights China’s claim that the BRI has generated 420,000 jobs and lifted 40 million people out of poverty. However, many in the West perceive its true purpose to be the establishment of a Chinese-led world order conducive to the flourishing of unsavoury regimes.

The article acknowledges the significant success of the BRI during its initial decade, which enhanced China’s status as the largest creditor in the developing world. The initiative has brought tangible benefits to several developing nations by facilitating the construction of infrastructure that would have otherwise been neglected.

Nevertheless, the momentum of the BRI has decelerated due to China’s previous imprudent lending practices towards economically vulnerable countries, prompting a more cautious approach in recent years.

Despite this moderation, the BRI remains a vital component of President Xi Jinping’s overarching strategy to garner support from the global south for China’s non-democratic model of development.

The article also emphasizes how Western nations, initially slow to grasp the significance of the BRI, are now scrambling to propose alternative development plans.

Unjustified optimism on BRI: Insights from Kahneman’s behavioural principles

Commenting on BRI, Prof Low noted that when the BRI was launched ten years ago, he was mostly sceptical about it being a force for good in developing countries.

“True, the global south certainly needed more infrastructure, and if the Chinese wanted to provide cheap credit for such investments, what’s so bad about that?”

Nevertheless, he acknowledged that his scepticism at the time, which has since been validated by the Chinese’s recent lending cutbacks and internal criticisms of the BRI, was grounded in “two behavioural principles” illuminated by the renowned Israeli-American author, psychologist, and economist, Daniel Kahneman.

Prof Low contended that the first principle, “the outside view,” often offers more accurate insights than the predictions of insiders.

He highlighted that conversations with individuals involved in BRI projects, whether in China or the recipient countries, often yield unwarranted optimism and confidence.

To counter this, Kahneman recommended adopting the outside view, employing a concept called reference class forecasting.

“This means identifying suitable comparators and looking at how the comparators did to generate our baseline predictions. Then use the information we have about the project to revise those predictions.”

In the context of the Belt and Road Initiative, Prof Low suggested that suitable comparators would be World Bank projects, which have demonstrated a mixed performance history.

“That should already make us mighty suspicious of Chinese pronouncements that the BRI would be a resounding success. ”

China’s inexperience in development financing

He further pointed out that when considering the Chinese’s comparatively limited experience in development financing compared to the World Bank, one might predict that, on average, projects under the Belt and Road Initiative (BRI) could potentially perform notably worse than those financed by the World Bank.

A second key insight he shared was that individuals often display an excess of optimism and confidence, particularly at the outset of any undertaking.

Prof Low outlined several reasons underlying this tendency, including the early stages fostering increased enthusiasm and motivation.

“Project choice is also of higher quality in the early stages. As time passes, quality degrades, enthusiasm wanes, control slackens, and performance declines. This is the universal law of entropy.”

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rest in power, sri lanka. our newest MRT lines also built by commies(sub corp of japan). hope don’t derail hor!