On the surface China's Belt and Road Initiative looks in rude health. In March, the huge global infrastructure scheme pushed further into Europe, signing a deal with Italy. Then last week Malaysia relaunched a multibillion Chinese-backed railway, previously canceled on cost grounds. When President Xi Jinping welcomes global leaders to his second glitzy BRI Forum in Beijing next week, he would be forgiven for feeling triumphant.
Underneath, however, Xi's signature foreign policy now faces its most significant challenge since it was launched five years ago, and one rooted in fact that China is on the verge of running current account deficits for the first time in decades. For all BRI's eye-catching expansion, China's leaders face increasingly tricky choices about how to deploy money abroad, not least given that BRI itself is far from the best use for that cash.