Coronavirus slows China's Belt and Road push
Feb 18: When President Xi Jinping made his first state visit this year to Myanmar and signed new infrastructure contracts, there was no indication of the obstacle about to trip up China's plan for railways, ports and highways around the world: the coronavirus.
Travel restrictions to prevent the spread of the disease, which has now killed more than 1,800 people, have idled much of the world's second-largest economy and choked key elements of Xi's signature Belt and Road Initiative (BRI).
Chinese workers cannot get to overseas projects, and factories are cut off from the Chinese imports they need to keep running, according to more than a dozen company executives and officials.
"Many factories in China remain closed; those that are open cannot reach full capacity," said Boyang Xue, a China analyst at Ducker Frontier. "Since many BRI projects tend to source equipment and machinery from manufacturers based in China, the disruptions in industrial production and supply chain will cause further delays."
One giant project, China Railway International Group's $6 billion high-speed railway in Indonesia, is on a war footing.
The state enterprise has set up a task force to monitor the coronavirus' spread and urged all Chinese employees who went home for the Lunar New Year holiday not to return to Indonesia, a senior executive with the company said on condition of anonymity, as he was not authorized to speak to the media.
The company has stopped more than 100 Chinese personnel, mostly skilled workers or managers, from returning to the project linking Indonesia's capital Jakarta with the textile hub of Bandung, about 140 km (85 miles) away, the executive said.
"We have to focus on less-critical parts of the railway project until some of our key people come back to work," he said. "We're getting off to a very bad start in 2020. Our project has been dogged by delays and controversy, and this coronavirus brought us bigger challenges."
China's top regulator of state-run companies said in a Tuesday briefing that the outbreak has caused "difficulties" on some overseas projects and investments.
The country "has already communicated with overseas companies, overseas owners, and governments as early as possible to gain support and understanding," said Peng Qinghua, secretary general of the State-owned Assets Supervision and Administration Commission.
Several Chinese companies in Indonesia, including Tsingshan Holding Group, GEM Co Ltd (002340.SZ) and Zhejiang Huayou Cobalt (603799.SS) saw nickel and cobalt projects disrupted as Southeast Asia's biggest economy stopped flights from China in early February and denied entry to people who had been in mainland China in the previous 14 days.
"The new projects may be postponed a little, but not that much," said an executive at one of the companies, who had planned to travel to Indonesia before the travel ban made it impossible.
More than 133 countries have imposed entry restrictions on Chinese citizens or people who have visited China, according to the Chinese National Immigration Agency. -Reuters