China’s Global Development Finance Poses Heterogeneous Risks to Coastal and Marine Socio-ecological Systems

​​As the largest bilateral creditor of overseas development finance, Chinese development finance is under growing scrutiny for its impact on marine systems and the more than 27 million coastal Indigenous peoples around the world who rely on a healthy and functioning marine ecosystem for food and income.

How risky are Chinese development finance projects to marine socio-ecological systems? What types of projects carry the least or greatest risk? How can China take steps to “blue” its overseas development finance portfolio?

In a new journal article published in One Earth, researchers from the Boston University Global Development Policy Center, the University of Queensland, University of California Santa Barbara and Colorado State University provide the first comprehensive, quantitative evaluation of the risks to marine socio-ecological systems across China’s diverse portfolio of overseas development finance. They quantified the marine risks of 114 coastal development projects financed by China from 2008-2019.

Main findings:

• The 114 projects analyzed represent 20 percent of all Chinese development finance projects that have been geolocated with the highest precision, worth nearly $65 billion in finance commitments (7 percent of all commitments) from 2008-2019.
• Risks to marine habitats are most prominent in Caribbean island nations, such as the Bahamas and Antigua and Barbuda, as well as coastal waters across Africa, most notably along Western and Central African coastlines.
  • In the Bahamas, Angola and Mozambique, more than 2,000 km2 of marine habitats face high impact risks.
• Among recipient countries of Chinese overseas development finance, those with the smallest extent of risk include Myanmar, Kenya and Liberia.
  • Smaller impact risks are more pervasive across countries. Angola, Fiji, Sri Lanka and Indonesia, for example, have more than 50,000 km2 of their marine habitats facing low but non-negligible risks from nearby projects.
• Ports present the greatest impact risks to marine habitats around the world and these risks remain high even up to 30 km from the port. 
  • These ports are present in the Bahamas, Antigua and Barbuda, Cuba, Mauritania, Côte d’Ivoire, Cameroon, Angola, Mozambique, Djibouti and Sri Lanka, and are a prominent driver of the regional hotspots of risk. 
  • The only fishing port included in this study—the Beira Fishing Port Rehabilitation project in Mozambique—presents the single greatest mean impact risk to marine habitats within 10 km of all projects considered in the study.
• Several other types of development finance projects present high impact risks within 1 km of the project site, such as power plants, bridges, roads and other facilities.
  • Impact risks decline rapidly, however, at increasing distances from the project site, with most types of projects presenting relatively low risks beyond 10 km, on average.
• Some of the most at-risk habitats over larger distances include pelagic surface waters, shallow soft bottom habitats and rocky reefs.
  • Impact risks tend to be highest for most habitats 1 to 5 km from the project site, including shellfish/suspension reefs, salt marshes, mudflats and rocky intertidal habitats.
• Chinese development finance projects present the greatest additive risks to marine habitats that are already experiencing high cumulative human impacts.
• While all projects were found to present some risk to threatened marine species and potential critical habitats, few presented high risks to nearby protected areas.

The researchers argue an agenda is needed for “blue-ing” the Belt and Road Initiative and all of China’s overseas development finance. Mitigating marine risks will require greater social and environmental safeguards, higher standards for host-country impact assessments and greater integration of land-sea risk mitigation and management approaches that are inclusive of the voices of local communities and Indigenous peoples.