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Belt and Road China’s Debt Trap Diplomacy
What is china’s debt trap diplomacy, and how is it affecting china’s offer belt and road participants? How is the west seeing China’s belt and road initiative?
Debt Trap diploamcy: Case study Sri Lanka
Look only to Sri Lanka to comprehend the geopolitical aspirations of China. After campaigning on a manifesto that included high pledges to improve his nation’s infrastructure, Mahinda Rajapaksa ultimately successfully ran for the presidency in 2005. As soon as he took office, he initiated negotiations with a Chinese government-owned company known as China Harbor to establish a partnership for the expansion of the Hambantota port, which is situated in the southern region of the island. The agreement with China Harbor was not cheap, and Sri Lanka does not precisely have an abundance of cash on hand. Therefore, the country’s government was forced to take out loans to contribute to the total cost. After initially borrowing $307 million from the Chinese Export-Import bank, Sri Lanka later borrowed $700 million (at a higher interest rate) and, finally, $1 billion from the Chinese financial institution. When Rajapaksa was removed from the government, the port was a financial disaster for the country, and Sri Lanka owed China more than three billion dollars. Following a series of negotiations, Sri Lanka agreed to give China ownership over the port. China will have control over a strategically important port for the next ninety-nine years due to its location on the Indian Ocean.
As reported by the New York Times, the narrative is one that people in the United States ought to become familiar with because China’s “Belt and Road Initiative” (BRI) is sure to generate several more stories like it in the coming years. The Belt and Road Initiative (BRI) signifies China’s ongoing strategy to consolidate its regional power and strengthen its geopolitical hand. Although it is being branded as a magnificent undertaking to offer infrastructure to impoverished countries in Central, South, and Southeast Asia, the BRI is, in reality, a signifier of China’s ongoing strategy.
What is Belt and Road (BRI) Initiative?
The land-based “belt” refers to a series of infrastructure projects constructed throughout Eurasia, following in the footsteps of the historic Silk Road. These would provide access to Central Asia’s enormous resources and connect China to the markets of Europe and the Middle East. The railway and maritime infrastructure projects that make up the maritime “road” are located in Southeast Asia, along the East African coast, and around the rim of the Indian Ocean. Due to these, the Mediterranean Sea, the Indian Ocean, and the Persian Gulf would all be easily accessible to China.
The China Global Investment Tracker is the only public data set that provides a comprehensive overview of China’s global investment and construction, which are documented separately and jointly. It encompasses approximately 3800 significant deals in various industries, including energy, transportation, metallurgy, technology, real estate, and others (as well as 350 troubled transactions). The American Enterprise Institute is the organisation that puts out the tracker.
According to its report, Since 2005, the cumulative value of China’s investments and construction projects in other countries has come to $2.25 trillion. The epidemic continued to dampen investment throughout the first half of 2022, but the construction industry is showing signs of improvement. Because of China’s limited presence in the world, the Belt and Road Initiative has taken on a considerably more significant significance. The United States of America, the European Union, Australia, and others continue to be cautious of Chinese businesses. The most important aspect of this work continues to be energy.
Participants in the Belt and Road (BRI) Initiative
The participating nations, which include Pakistan, Laos, Thailand, Mongolia, Kazakhstan, and Kenya, frequently lack the resources necessary to construct the infrastructure that China is delivering. However, as Will Doig points out in his latest book, High-Speed Empire, local officials frequently have opportunistic incentives for accepting BRI projects. These motivations are discussed in greater detail in the book. They can show their constituents that they are making progress on the infrastructure they promised while still obtaining bribes. As a result of this process, these officials end up bartering away their own countries in exchange for infrastructure that serves China’s interests more than the interests of the local populace. A railway in Laos, for example, was predicted to cost more than half of the country’s GDP and took a route through an area that saw very little traffic, which was counterproductive for the country’s industrial development. However, China, which has long desired a rail line that runs continuously to Singapore and lent Laos capital to cover the project’s cost, found that it made sense.
What is Debt trap diplomacy?
Debt-trap diplomacy is at the core of the Belt and Road Initiative (BRI): China exaggerates the benefits of these infrastructure projects and provides financing for them on onerous terms (via its export-import bank or the supposedly multilateral Asian Infrastructure Investment Bank, which China de facto controls), and then when the bill comes due, and its debtors are unable to pay it, demands control over the infrastructure and influence in the region as compensation.
It is pure geopolitics to transform these countries into satellite states by strategically building infrastructure, but that is precisely what is being done. For many years, China has been considering shifting to the west, and it is common knowledge that China wants to make headway in Southeast Asia. Problems have arisen due to the Belt and Road Initiative (BRI): the China–Pakistan Economic Corridor has harmed relations between China and India, and the political unrest in Southeast Asia is tied to China’s greater visibility and influence.
America’s response to Debt trap diplomacy and Belt and Road (BRI) Initiative
In any case, the United States of America should approach the BRI with an open mind, viewing it for what it is rather than what China portrays. Despite the Trump administration’s leanings toward bilateralism, Americans continue to believe that the best way to check the expansionist tendencies of China in the area is to take a multilateral approach. The Trans-Pacific Partnership (TPP), which would enable Americans to strengthen our ties with several of the BRI’s participating countries, should be the vehicle through which Americans reengage economically in the area. In the meantime, the United States government need actively, through diplomatic channels, to reject particular infrastructure projects that offer no clear advantage to the countries in which they are being built. Above all else, Americans should not put up with the creation of dual-use infrastructure that someday might be occupied by the People’s Liberation Army. James Mattis, the secretary of defence, lashed out at China for its antiquated method of conducting diplomatic relations, which he described as one “where all other nations are required to pay tribute or acquiesce to the more powerful government.” He is entitled to that privilege; nonetheless, the United States of America requires a strategy to match his words.
This article is produced initially at www.shahidsoomro.me