LONDON -- China celebrated the fifth anniversary of President Xi Jinping's Belt and Road initiative in September amid renewed questions over Beijing's true motives for funding huge infrastructure projects across Asia, Europe and Africa.
An analysis of data compiled by the American Enterprise Institute, a Washington-based think tank, found a widening disparity between the amounts committed in investment to Belt and Road projects and those signed off for construction contracts related to the initiative, many of which are handed out to Chinese state-owned companies.
Figures from the AEI's China Global Investment Tracker show that between 2014 and 2017 the cumulative value of construction contracts has been 50% higher for Belt and Road projects, at $230 billion, than for unrelated deals, which amounted to $148 billion.
In contrast, investment unrelated to the initiative exceeds Belt and Road investment by 221%.
"Most BRI countries are bleak prospects for investment because they do not have assets or companies that Chinese companies want to acquire," said Cecilia Joy Perez, research associate in demographics and political economy at AEI. "The countries that do draw investment are a select crowd."
Accordingly, private companies are highly selective when investing in Belt and Road countries.
Five economies -- Singapore, Malaysia, Russia, Israel and Indonesia -- accounted for 43% of the initiative's total investment volume between 2014 and 2017.
The evidence does not suggest there is genuine private-sector appetite for investment, Perez added.
Just 3% of Belt and Road construction projects are executed exclusively by private businesses, according to AEI data.
There was a slight increase in private-sector participation between 2015 and 2017, but the numbers have fallen back this year, largely due to the collapse of deal between CEFC China Energy and Russian oil giant Rosneft, which would have been worth more than $9 billion.
Perez suggested that private companies may be more hesitant to participate than their state-owned counterparts, as the risk outweighs the potential profit. Most governments have limited interest in assisting private enterprise, as evidenced by CEFC's failure in the Rosneft deal and similar investments in the Czech Republic.
If the private sector remains reluctant to get involved in Belt and Road, the initiative may turn out to be considerably more limited in scope than anticipated.
The largest construction deal under the initiative recorded in the data was agreed in 2014. The project was valued at $6.5 billion and involved Chinese funding for a nuclear power plant in Karachi.
China's largest construction deal outside the initiative over the same period was a $6.8 billion rail project in Nigeria involving the China Railway Construction Corporation agreed in August 2016.
With the addition of 41 countries in July, there are 118 participants in the initiative. The total value of Belt and Road construction projects has reached $380 billion, while investments stand at $180 billion.
There are suggestions that the initiative will suffer under a slowing Chinese economy and the effects of trade tensions with the U.S.
Datawatch is a series jointly produced by the Nikkei Asian Review and FT Confidential Research.