Beijing may be putting the brakes on its relentless infrastructure activity across the developing world. For years, China has offered low-cost, if not free, money to build roads and stadiums, in part to export industrial capacity amid its economic slowdown. That approach is changing, most notably in Africa. High-speed rail, for instance, could have connectivity benefits, but no African nation has the power-generation capability to run such a transport system. Beijing seems acutely aware of the implications of further miring its banking system in bad debt; it is offloading infrastructure risk to private-sector and multilateral alternatives. That message resonates at a time when many developing-world governments are looking to heavy construction to bolster economic prospects. The problem is that some of those projects are based on forced, if not artificial feasibility studies. Commercial viability, rather than populist appeal, is the new hurdle for infrastructure investment. ■
Our Vantage Point: With China offering controlled infrastructure outlays, emerging-market policymakers will rely on capital-market discipline to fund their projects. That restraint will lead to better-balanced deals for investors.
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Image: Zambia has strong economic-development ties with China. Credit: Zanzibar at Can Stock Photo Inc.
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