The Abe government is considering proposing a set of rules for infrastructure investment in developing countries when Japan hosts the Group of 20 summit in Osaka in June, after China has been criticized for engaging in “debt-trap” diplomacy with its aggressive project financing, according to sources.
Some of Beijing’s infrastructure financing projects have been criticized for burdening recipient countries with debts they can’t repay, forcing them into concessions in exchange for debt relief.
China has not openly opposed Japan’s proposal in working-level preparatory meetings, but government sources said it is too early to say whether Beijing is willing to accept the proposed rules to increase transparency of contracts and give due consideration to the debt repayment capacity of countries receiving investments.
In addition to the rules for ensuring transparency and responsible financing, Japan hopes to adopt the principle of ensuring “openness” of facilities without imposing restrictions on usage and “economic efficiency” by making infrastructure durable enough for long-term use, the sources said.
With Japan-China relations continuing to improve, Tokyo also expects the new rules to lay the groundwork for deeper cooperation between the two in foreign infrastructure projects.
Prime Minister Shinzo Abe is shifting toward conditional cooperation with Chinese President Xi Jingping’s “Belt and Road” infrastructure initiative under which Beijing wants to expand infrastructure networks in Asia, the Middle East, Europe and Africa to achieve its goal of connecting nations along the ancient Silk Road trade routes.
China has been bolstering its economic clout with foreign investments, signing a memorandum of understanding with Italy last month to jointly advance the “Belt and Road” projects, the first time Beijing has struck a deal under the cross-border initiative with a Group of Seven industrial power.
Leaders of some major countries attended the second summit of the “Belt and Road” forum held through Saturday in Beijing.
Apart from trade and investment issues, the upcoming G20 summit is likely to focus on gender issues and aging, as well as climate change and reaffirming the importance of multilateralism for global problems.
Among them is how to reduce plastic waste in the world’s oceans and waterways. Tokyo has said it will raise the issue with G20 leaders. Since then, local governments around Japan have begun reviewing their own policies on plastic use.
Locally, the G20 gathering is seen as a chance to boost to Osaka’s tourism industry and raise its international profile. The Kansai business community is especially keen on that point.