“SAN LUIS, Ecuador — Built near a spewing volcano, it was the biggest infrastructure project ever in this country, a concrete colossus bankrolled by Chinese cash and so important to Beijing that China’s leader, Xi Jinping, spoke at the 2016 inauguration,” began Ryan Dube and Gabriele Steinhauser for the Wall Street Journal last week.

“Today, thousands of cracks have emerged in the $2.7 billion Coca Coda Sinclair hydroelectric plant, government engineers said, raising concerns that Ecuador’s biggest source of power could break down,” wrote Dube and Steinhauser.

The fault lines spreading in San Luis, Ecuador, aren’t the only cracks to appear in China’s vast Belt and Road Initiative in recent weeks.

“Uganda has turned to Turkey to build its railway after China talks fell through,” reported Faustine Ngila on January 13, 2023, for Quartz.

The China Harbor Engineering Company (CHEC), under the auspices of China’s ambitious global Belt and Road Initiative, will not be building a 273-kilometer railway from Uganda’s capital city to its border with neighboring Kenya, after all.

The project, which has been stalled for years, will now likely go to a Turkish firm, Yapi Merkezi — the company responsible for successfully building a similar railway system in nearby Tanzania.

“This was preceded by China’s hesitance to finance the landlocked east African economy with the $2.3 billion needed for the project, seemingly as a precaution, given previous defaults by African countries like Zambia and Ghana,” wrote Ngila.

As China’s Belt and Road loans have fallen into default, the Chinese Communist Party has begun serious damage control.

“China Reins In Its Belt and Road Program, $1 Trillion Later,” reported the Wall Street Journal on September 26, 2022.

“China has spent a trillion dollars to expand its influence across Asia, Africa, and Latin America through its Belt and Road infrastructure program,” wrote WSJ contributor Lingling Wei. “Now, Beijing is working on an overhaul of the troubled initiative, according to people involved in policy-making.”

“Dubbed Belt and Road 2.0 in internal discussions,” changes to the program included a more rigorous assessment of credit risk, renegotiating debt, and other measures.

Chinese Communist Party leader Xi Jinping went from calling Belt and Road “the project of the century” to admitting in November that the initiative had become “increasingly complex.”

That’s about as close to an admission of failure as media outlets are ever likely to get.

“Beijing has also dialed down its rhetoric in state media,” noted Lingling Wei for the Wall Street Journal, paraphrasing George Mason University senior research fellow and CCP propaganda expert Weifeng Zhong. “While it used to tout the economic benefits of Chinese lending for recipient countries, it now emphasizes managing risks and improving international cooperation.”

“China is attempting a course correction,” Mr. Zhong told the WSJ, simply.

A course correction may be overdue.

In 2010, only 5% of China’s Belt and Road loans were to financially distressed nations. In 2023, that number is up to 60%.

That is quite an over-extension. And it isn’t the only major crack appearing in the Belt and Road Initiative.

“Corruption Flows Along China’s Belt and Road,” warned the Center for Strategic & International Studies on January 18, 2019.

An investigation by the Wall Street Journal earlier that month had revealed the ugly underside of some BRI negotiations.

“China Offered to Bail Out Troubled Malaysian Fund in Return for Deals,” blared the WSJ on January 7, 2019. “The secret discussions show how China uses its political and financial clout to bolster its position overseas.”

“What can no longer be denied is that the BRI is opaque by design,” CSIS pointed out. “By limiting outside scrutiny, the initiative’s lack of transparency gives Chinese companies an edge in risky markets, and it allows Beijing to use large projects to exercise political influence.”

Obstacles on China’s now-rocky Belt and Road Initiative are piling up ahead, partially as a result of all that opacity and obfuscation in risky credit markets.

“China’s Global Mega-Projects Are Falling Apart,” reported the Wall Street Journal on January 20, 2023. “Many of China’s Belt and Road infrastructure projects are plagued with construction flaws, including a giant hydropower plant in Ecuador, adding more costs to a program criticized for leading countries deeper into debt.”

It is a time when emerging nations can least afford to be thrust deeper into debt, austerity, and uncertainty. The past three years and counting of Covid, slow-downs, shut-downs, supply chain woes, and inflation are hitting the poorest nations much harder than experts anticipated.

“The mood in many developing countries is anxious,” noted Martin Wolf for the Financial Times on January 24, 2023, after a recent stint in Davos.

“The worries of some policymakers, especially those from Africa, were palpable,” Wolf admitted. “The stories coming out of China and India, the world’s giant emerging economies, were rather different.”

“China is not just open again, at home and abroad, but is also embracing the private sector,” repeated Wolf, quoting CCP outgoing vice-premier Liu He. “A western businessman I know well, a long-term resident in China, confirmed the shift.”

“A plausible explanation is that Xi Jinping has decided that growth matters,” Mr. Wolf concluded cautiously. “This year, it will clearly be strong. Whether the new approach will be sustained in the longer term is uncertain. That is inevitable when power is so concentrated. The urge for tight control will surely return.”

But a new “growth matters” strategy is pure speculation, and only one of many possible explanations for the shift, if indeed a shift has taken place.

And the urge for tighter control — both at home in China and around the world — won’t “surely return.”

In truth, it never left.

What these cracks reveal, perhaps most poignantly, is that the Chinese Communist Party doesn’t have as much control, invulnerability, or money as it would like.

(contributing writer, Brooke Bell)