[China’s “Debt-Trap diplomacy” Unveiled: Part 1/6]

According to an article by John Pomfret on Washington Post (August 27, 2018), China employs the tactics of “debt-trap diplomacy” to gain influence overseas by bankrupting its partners and bending them to its will.

This series draws your attention to China's ”One belt and one road initiative” that was introduced since 2013.

As of 2018, China is involved in the investment of transportation, energy, and telecommunications infrastructure in at least 68 countries in Europe, Africa, and Asia.

The effects of the One Belt and One Road initiative are collected and summarized from different reports as follows:

(to be continued)

Reference: John Pomfret, ‘China’s Debt Traps Around the World Are a Trademark of Its Imperialist Intentions’, Washington Post, August 27, 2018;
Michael Kugelman, “Understanding China's Belt and Road Initiative”, Asian Affairs 2019, https://www.tandfonline.com/doi/full/10.1080/03068374.2019.1602383

#beltandroad #debttrap

[China’s “Debt-Trap diplomacy” Unveiled: Part 2/6]
Effects of the One Belt and One Road initiative (1): High-interest debt risks

In 2018, there are 23 countries (10 from Asia, 7 from the Middle East and Africa, and 6 from Europe and Eurasia) at high risk of debt distress under the One Belt One Road Initiative.

In particular, there are 8 countries with extremely high risks: Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan.

In Africa, many countries such as Djibouti, Burundi, Chad, Congo, Mozambique, Ethiopia and Kenya are in debt distress or at high risk of it due to China's lending practices.

The consequence is unimaginable: For instance Djibouti has a public debt risen to 88 percent of the country’s GDP and has become China’s first overseas military base.

Reference: ‘Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective’, Center for Global Development 2018

#debttrap #beltandroad

[China’s “Debt-Trap diplomacy” Unveiled: Part #3/6]

Effects of the One Belt and One Road initiative:
(2) Corruption, procurement and lack of transparency on governmental level
(3) Stranded infrastructure

234 out of 1,674 Chinese-invested projects in the 66 Belt and Road countries encountered problems such as public opposition to projects, objections over labour policies, performance delays, concerns over national security, deriving from poor administration

(to be continued)

Source: “China’s Belt and Road difficulties are proliferating across the world”, Financial Times, 9 July 2018,
https://www.ft.com/content/fa3ca8ce-835c-11e8-a29d-73e3d454535d

#beltandroad #debttrap

[China’s “Debt-Trap diplomacy” Unveiled: Part 4/6]

Effects of the One Belt and One Road initiative:

(4) Environmental risks

In Africa, China's investment and infrastructure has stripped the continent off its natural resources, employment and growth, resulting in deep debt, pollution, destruction of agrarian land and unregulated mining.
In Cambodia, Lao PDR, Myanmar, Thailand and Vietnam, China-backed hydropower projects along the Mekong River have caused river flow to change and blocked fish migration.
Scholars and practitioners's distinct and valuable message about the state of environmental risk along the Belt and Road: “More clean projects don’t compensate for all the dirty ones”.

(to be continued)

Reference: “China’s BRI negatively impacting the environment,” The ASEAN post, 19 February 2019, https://theaseanpost.com/article/chinas-bri-negatively-impacting-environment;

"China's infrastructure plans offer a contradiction”, 2 July 2019, https://today.duke.edu/2019/07/more-good-more-bad-china’s-infrastructure-plans-offer-contradiction

#beltandroad #debttrap

China’s “Debt-Trap diplomacy” Unveiled: Part 5/6]

Effects of the One Belt and One Road initiative:

(5) social risks
The economic zones in Pakistan are only reserved for Chinese companies only.
Chinese workers are usually employed in China-funded infrastructure plans, so the local workers in the host countries have little benefit and are subject to unemployment.

(6) a loss of sovereignty over key assets

Some examples:
In Zambia, China takes over the country's international airport to settle a debt instalment
After the financial crisis in Greece, Chinese firms bought 51% of the port authority in Piraeus port in 2016
In 2017, Sri Lanka gave its strategic Hambantota port to China to operate for 99 years om order to pay off its debt

(to be continued)

Reference: “The 'New Great Game': China's Debt-Trap Diplomacy”, The European Foundation for South Asian Studies, October 2017
https://www.efsas.org/publications/study-papers/the-new-great-game-chinas-debt-trap-diplomacy;

“China's Debt Diplomacy”, Foreign Policy, 15 April 2019, https://foreignpolicy.com/2019/04/25/chinas-debt-diplomacy/

#beltandroad #debttrap

[China’s “Debt-Trap diplomacy” Unveiled: Part 6/6]

The Risks of China’s “Debt-Trap diplomacy”:
- China gains leverage economic, political and military power
- Total Chinese monopoly

As John Pomfret writes on Washington Post, “the Chinese have called their system 'socialism with Chinese characteristics.' Perhaps 'imperialism with Chinese characteristics makes more sense.”

Reference: John Pomfret, ‘China’s Debt Traps Around the World Are a Trademark of Its Imperialist Intentions’. Washington Post, August 27, 2018, https://www.washingtonpost.com/news/global-opinions/wp/2018/08/27/chinas-debt-traps-around-the-world-are-a-trademark-of-its-imperialist-ambitions/?utm_term=.0d474e84218c

#beltandroad #debttrap