China to cut back on foreign infrastructure investment
China, which has shown interest in funding numerous new port and infrastructure projects in developing countries, is now having to re-evaluate its position given Venezuelas wish to default on Chinese debt.
Investment in projects in those countries that depend on the export of commodities is viewed as being particularly at risk, especially in Africa.
The falling global oil price has ravaged the Venezuelan economy, forcing the president to renegotiate its debt repayments with China, which in turn is now have to re-evaluate the fiscal stability and political risk at lending to similar countries.
Previously, China’s President Xi Jinping had set aside $60bn for projects in Africa over the next three years, which would have been distributed as preferential loans and state backed investment. Those countries with commodity exports attractive to China would have been the main recipients, but Chinese backing is now seen as being more circumspect.
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