Xi visited Russia in the last month and invited Vladimir Putin to visit China this year for the third Belt and Road Forum. This is to give the massive undertaking a new boost.
China's Belt and Road Initiative, at its height, was seen by many as the center of Beijing's engagement in the world.
Observers say that a decade on, the ambitious plan to create infrastructure links in Eurasia, and beyond, is losing momentum. Some are even questioning whether Beijing's mega project will continue to be viable.
Bradley Parks of AidData, an independent research group at College of William and Mary, Virginia, stated that "Beijing has been on a lending binge and issued thousands of loan worth almost a trillion dollars for large-ticket infrastructure projects in 150 countries".
Parks states that many borrowers have difficulty paying back their debts to Beijing for infrastructure projects. In 2010, only 5% China's portfolio of overseas lending supported borrowers who were in financial distress. He told CNBC that the figure is now 60%.
In 2013, Chinese President Xi Jinping unveiled his "project of a century" - a signature idea for foreign policy.
Xue Gong is a Carnegie China nonresident scholar who noted in March that the momentum behind the Project "appears slow due to the repercussions from debt sustainability, coronavirus pandemic and China's economic slowdown."
According to a report from Fudan University, the cumulative total of China's Belt and Road projects has reached $962 billion. This includes $573 billion worth of construction contracts and an additional $389 billion worth non-financial investment.
Parks said that Beijing faces a major challenge in loan repayment and is responding by making a strategic pivot. It is reducing infrastructure project loans and increasing emergency rescue lending.
The Chinese embassy in Singapore said to CNBC, "It is true that debt risks for developing countries have increased significantly over the past few years, but there are also external factors."
"We never require others to borrow money from us. Meng Shuai, a spokesperson for the company, said that we never tie loan agreements to political goals or pursue selfish political agendas. We have always tried to do our best to ease the debt burden of developing countries.
Interest Rates of 5%
Parks, of William and Mary, was one of the co-authors of a March report by researchers from AidData, the World Bank and the Kiel Institute for the World Economy.
The report states that China has issued 128 emergency loans totaling $240 billion in 22 countries, including Pakistan, Sri Lanka, and Turkey. The report stated that nearly 80% of these loans were given between 2016 and 2020.
The study noted that China's emergency bailouts are not cheap.
The report stated that "the typical rescue loan from Chinese banks requires an interest rate of 5 percent." These rates are "considerably more than the average IMF rate of interest, which was around 2 percent in the non-concessional loan operations for the past 10 year."
Parks said that the report raises concerns about "the sustainability of China's entire initiative on a long-term basis". "I believe this is just a sign of what's to come."
Belt and Road: Trying to salvage it
According to an observer, Chinese efforts to revitalize Belt and Road began in 2020.
Weifeng Zhong is a senior research fellow at George Mason University's Mercatus Center. He claims that Xi "is trying to salvage Belt and Road" with the overhaul after 2020.
Zhong says he conducted an analysis of the People's Daily (the state-controlled paper for the ruling Chinese Communist Party) over the last decade.
He said that when the People's Daily covered the initiative it used to highlight the ambitious economic outlooks for the infrastructure projects as well as the destinations countries.
Zhong says that since 2020 the emphasis has shifted on the importance of "high-quality" development.
The statement was a nod towards the fact that many Belt and Road Projects were never economically viable. "The initiative has not been cost-effective at least."
China on the hook
Many countries are struggling to pay their debts due to China because of a slowing global economic growth, high interest rates and inflation.
According to a World Bank study on 2022 international debt statistics, the debt owed to China in South Asia has increased from $4.7 billion to $36.3 billion. Beijing is now the biggest bilateral creditor of Maldives Pakistan and Sri Lanka.
Sri Lanka missed its first debt payment last year. In 2017, Sri Lanka signed over to China the rights to an important strategic port in a high profile case that raised concerns about Beijing's lending policies.
Zhong said that the increased debt in many Belt and Road nations is a result of Beijing overshooting its pre-2020 targets.
He added that "China did not only try to lend money to infrastructure projects where other lenders were not available, but also sought commercial terms or at least less concessional ones, which made repayments even more unlikely."
Sri Lanka's economy has collapsed
Gabriel Sterne of Oxford Economics, who is head of emerging market macro, said that for countries in financial distress, "who don't want economic adjustment to be made immediately", China would be the first choice.
"China might sometimes be inclined" to give the loan. "I don't think that will change anytime soon," he added.
The former economist of the IMF added that "the ongoing debt crisis will teach China an important lesson."
Sterne said that Beijing should have "placed more emphasis on grants than loans" for countries with heavy debt burdens.
The Chinese Embassy in Singapore has told CNBC that "China attaches great importance to debt sustainability" and issued guidelines to address the issue with developing countries in order to "improve their debt management capability."
Debate on the 'debt trap'
Some Western nations have criticized China's loans for years, calling it "debt-trap diplomacy."
Debt-trap argument: Beijing strategically traps borrowers in loans they can't repay to gain political influence later.
Parks said that if China wants to "put an end to the narrative of it engaging in predation or entrapment," then it must be transparent about its lending practices overseas.
Beijing "has fueled suspicion and speculation about its actions by refusing comprehensive and detailed information on the individual projects it funds," said Mr. Addison.
The Chinese Embassy in Singapore said that "to date, none" of the partner countries has accepted the claim that the initiative had "created 'debttraps'".
The embassy stated that China's financing practices have always been "open and transparent", noting that the majority of projects were commercially contract and the Chinese government was not a stakeholder.
Xi's grip on power is tighter than ever, but it doesn't inspire much optimism - on the initiative or in any other way.
The spokesperson stated that it was not up to the Chinese government whether or not details of loan agreements and projects can be made public.
Analysts agree that despite its loan issues, China won't abandon the mega project, as it is closely linked to Xi.
According to reports, the Chinese leader who visited Russia in the last month has invited Vladimir Putin to travel to China this year for the third Belt and Road Forum, which is intended to give the massive undertaking a new impetus.
Xi formally clinched a third term, an unprecedented one, as president of China for five more years in March. This further solidified his power.
Zhong, from George Mason, said: "Now that the transition of the government is complete, it will be interesting to see if a pragmatic group, perhaps led by Li Qiang as the new premier, emerges."