Raghuram Rajan: prediction

Transcript context

…One Belt, One Road emanating from China — is it even a real thing? Is it just public relations? What’s your prediction? What’s your take? It is a real thing. But like any country doing something so gigantic, I think they’re learning that there are lots of unintended consequences. Some of the debt traps that countries have gotten into as they’ve built out some of the infrastructures associated with the One Belt, One Road — I don’t think that was necessarily intentional on the part of the Chinese. But they do realize that it creates a tremendous amount of resentment. You think people are happy because you’ve essentially financed this infrastructure for them? But nobody’s using it, and the people on the other side say, “Look, why did we build this? This is a white elephant.” So I think there are aspects of One Belt, One Road which are going that way. There are also successes. Longer run, I think, as an important thrust, an important international responsibility of the Chinese, this is an important step forward. The Chinese have grown internally and now are saying “What do we do for the world?” We should look at what they’re doing and see how it can be pushed in the right direction. Why does China have such a bad record at cultivating allies? Maybe Cambodia, maybe North Korea, Pakistan perhaps. But China has remarkably few allies relative to its GDP.…

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