When Xi Jinping launched the Belt and Road Initiative (BRI) in 2013, just months into his first term as head of the Chinese Communist Party (CCP), Beijing presented it as one of the century’s most ambitious global development plans.
It promised to reshape infrastructure across Asia, Africa, and Latin America with highways, ports, energy grids, and railways. The pitch was simple: China could build faster, cheaper, and at greater scale than the West.
Official data reinforced the sense of scale. China’s Ministry of Commerce reported that in the first seven months of 2025, Chinese enterprises invested about US$22 billion in non-financial sectors of BRI partner countries, up 24.7 percent year-on-year.
By November 2025, social media tallies counted 47 central state-owned enterprises participating in over 3,116 BRI-related projects, through investment, joint ventures, and construction.
These projects span three dominant categories:
- Major infrastructure: railways, highways, ports
- Energy development: over 60 oil and gas pipelines and power plants across 20+ countries
- Digital/industrial infrastructure: cross-border data systems, data centers, 5G networks, industrial parks
Wage delays spread across multiple continents
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But a decade later, cracks are evident in the multi-trillion-dollar BRI scheme.
A wave of wage-arrears scandals has surfaced across Asia, Africa, the Middle East, Eastern Europe, and Latin America. At least 14 countries now report that Chinese firms delayed paying workers for months, sometimes half a year or longer.
Alarmingly, many implicated firms are China’s flagship state giants: Sinopec, China Railway, China State Construction Engineering, CNPC, PowerChina, MCC, China Energy Engineering Corporation, CCECC, and others.
Analysts warn that the same competitive advantages Beijing boasts of — “low cost, fast speed, flexible financing” — were built on compressed labor costs, weak oversight, and long subcontracting chains.
Now that wage disputes are visible across continents, China’s reputation in developing countries is taking a hit.
Years of wage disputes set the stage for today’s Belt and Road crisis
The BRI became official policy in late 2013 after Xi outlined land and maritime routes during visits to Kazakhstan and Indonesia.
Within two years, cracks appeared. In 2015, more than a hundred Chinese workers in Belarus marched ten kilometers to the Chinese embassy after months of unpaid wages. It shocked local authorities and hinted that all was not well inside Beijing’s global showcase.
In Africa, China’s participation in Guinea’s multi-billion-dollar Simandou iron ore megaproject — intended as a model of China–Africa cooperation — was marred by unpaid wages and overtime. Chinese and local workers staged joint protests.
In Southeast Asia, Chinese workers in Sihanoukville, Cambodia, hung banners in 2019 demanding pay. In early 2024, China State Construction’s Fifth Bureau faced a strike in Guinea where angry workers reportedly pointed guns at their managers.
In Laos, local workers reportedly occupied a Chinese consular site over delayed payment. In Indonesia, workers at the Jakarta–Bandung high-speed rail project protested delayed engineering payments.
In the Middle East, hundreds of workers at Sinopec’s Fifth Construction project in Saudi Arabia staged a mass strike after going seven months without pay, with many forced to rely on online loans.
Observers argue the root cause lies in the subcontracting model exported globally: the “pyramid chain” where state-owned firms hold the contract but layers of subcontractors perform the work.
When political instability, delayed payments, or financing strain hit, the pressure cascades down the chain. Workers at the bottom are the first to feel the pain.
Financial pressures are undermining China’s overseas projects
Experts say China’s global construction machine has never been as financially stable as Beijing suggests.
Early BRI projects operated under a “diplomacy first, economics second” strategy — bidding low on purpose to cultivate political influence abroad. Profit margins were thin from the start.
As political turmoil or economic downturns emerged in partner countries, payments were delayed, reduced, or frozen. Meanwhile, China’s own slowing economy and struggling local governments reduced the funding available to support overseas projects.
State-owned enterprises (SOEs) began tightening cash flow abroad just as financial pressure intensified at home.
One state report indicated that among overseas projects by Chinese central government-run SOEs, profits, break-evens, and losses each accounted for roughly one-third.
Several high-profile BRI investments also underperformed or collapsed:
- Sri Lanka’s Hambantota Port refinery project stalled from 2019 onward
- China Steel’s investment in Australia’s Midwest Corporation resulted in about $1.37 billion USD in losses
- China Power Investment’s Myitsone dam project in Myanmar remains suspended, facing a $3.6 billion USD write-off
Analysts say these problems reveal a deeper tension: Beijing wants diplomatic leverage, but state enterprises need financial survival. When those clash, labor is the first cost to be squeezed.
Delayed wages have effectively become a form of informal financing, a cash-flow buffer disguised as payroll postponement.
As wage disputes and stalled projects multiply, more countries are reassessing the BRI. Italy, Panama, Lithuania, Estonia, Latvia, and the Philippines have either exited or significantly scaled down cooperation.
Diplomats and scholars argue the crisis is less about money than trust.
When stories of unpaid workers across five continents dominate headlines, the BRI’s image shifts from “China’s global masterpiece” to a portfolio weighed down by distressed assets.
