China’s Belt and Road Initiative has resulted in several unsustainable debt-for-infrastructure deals in South Asia and Europe, which further Beijing’s geostrategic ambitions.

By Shantanu Roy Chaudhury | The Wire (originally published on March 7, 2021)

Summary

A closer look at a recent spate of articles and studies in the U.S. and Europe that seek to reframe the perception of China’s “debt trap diplomacy” via its new economic “Silk Road,” the Belt and Road Initiative (BRI). Portrayed as purely economic ventures, the various writings portray partnership projects in foreign countries as predating the BRI. Rather than characterize the type of diplomacy BRI entails—funding for expensive infrastructure projects that force host countries into unsustainable debt to gain political or economic concessions—the authors place blame for unrepayable debt loads on host countries’ fiscal mismanagement.

In reality, argues Shantanu Roy Chaudhury for The Wire, China’s BRI investments are strategically motivated, and take into account host countries’ ability (or inability) to repay in tandem with China’s end goal of enhancing its global power. While China has waived debts and negotiated loans in Africa (as part of its “long game” foothold on the continent), The Wire compares this to other regions where China has capitalized on debt-for-infrastructure deals to further its interests.

One example revealed by a New York Times investigation cited by The Wire concerns Sri Lanka, where the country relied on Chinese financing for a deep-water inland port that would transform the small coastal town of Hambantota into a major international shipping hub. When Sri Lanka became unable to repay debt incurred, rather than an easing in negotiating terms, China secured a 99-year lease of the port, a 70% stake (held by China’s CMPort), as well as 15,000 acres of surrounding land.

Strategically located in the Indian Ocean region, the port poses security concerns for India in relation to China’s bid to increase its influence in the region, along with fears China will use Hambantota to expand its military footprint (in November 2014, China docked submarines at Colombo, Sri Lanka’s capital).

Read the original version of this article at the publisher’s website here.