China emerges as potential investor as Lebanon runs low on options

Wael Taleb

Jul 22, 2020

A Lebanese protester lifts a placard which reads "850 staff were laid-off while staff of the (defunct) railroads sector still get paid" during a demonstration of former employees of the American University Medical Center outside the hospital in the capital Beirut, on July 20, 2020, after they were dismissed from their jobs last week as part of a series of sweeping layoffs planned for the American University of Beirut and its medical center to cope with a severe recession resulting from the country's economi — A Lebanese protester lifts a placard that reads, "850 staff were laid off while staff of the railroad sector still get paid" during a demonstration by former employees of the American University Medical Center outside the hospital in the capital Beirut, on July 20, 2020. — JOSEPH EID/AFP via Getty Images

As the crisis-hit country continues to seek financial assistance from the international community and the Gulf without signs of promise, Lebanon is looking east at investments from the People’s Republic of China.

Hezbollah leader Hassan Nasrallah suggested in a televised address June 16 that Lebanon should welcome Chinese investments in key infrastructure projects. Nasrallah also blamed Washington for the dollar shortage and implied that China could offer a vital counterweight.

Discussion of the idea's feasibility made headlines in the Lebanese media. Al-Akhbar newspaper claimed that Chinese firms and state-owned institutions are interested in investing $12 billion in ports, railroads, electricity and waste management.

Speculation over Chinese assistance has increased as negotiations with the International Monetary Fund have faltered in recent days. The breakdown follows a dispute between the Lebanese government and the Central Bank over financial losses as well as the resignations of two members of the government's negotiating team on the grounds that the government lacks the political will to implement reforms. The last meeting with the IMF, attended by Energy Minister Raymond Ghajar, was held July 17. Since then the talks have stopped, according to a member of the Lebanese negotiating team speaking to Agence France-Presse on condition of anonymity.

China emerges as potential investor as Lebanon runs low on options

As Lebanon struggles to find countries willing to provide financial assistance during its economic meltdown, China seems to emerge as a serious contender.

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