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HomeGeopolitical CompassEast AsiaThe Chinese ‘Debt Trap’ Is a Myth

The Chinese ‘Debt Trap’ Is a Myth

Authors: Deborah Brautigam and Meg Rithmire

Affiliation: School of Advanced International Studies at Johns Hopkins University, Harvard Business School

Organization/Publisher: The Atlantic

Date/Place: February 06, 2021/USA

Type of Literature: Analysis

Word Count: 2,100

Link: https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/

Keywords: China, BRI, CPEC, Debt-trap diplomacy, Sri Lanka, Hambantota port, Geopolitics.

 

Brief:

 

This investigations-based analysis of China’s expanding footprints on the world map through its investments is a glaring example of how Western capitals and their allies have manipulated the Belt and Road Initiative (BRI). This piece specifically deals with Chinese investments in Sri Lanka’s Hambantota port since 2007, and how it is being weaponized as Beijing’s “trap” of the poorer countries. Professor Brad Glosserman, in one of his daily Japan Times columns last year, traced the roots of “Debt Trap” term to an Indian think tank which launched this diatribe in 2017. The reasons appear nefarious, as China went in to investing over $50 billion into a network of railways, roads, bridges, and electricity projects that now form the China-Pakistan Economic Corridor – a massive infrastructure plan to open western China to Europe through Pakistan’s Gwadar port into hot waters of the Arabian Sea. The Atlantic’s investigations dissect the propaganda which the West – the US in particular – uses to undermine the BRI. A Canadian firm which had done an analysis of the Hambantota port termed it good for investments, long before the Chinese firms won the tender to start construction – at least six years before President Xi Jinping launched the ambitious BRI. The domestic politics of the port, which is now operated by a Chinese firm on a 99 years lease, is also important since it is the native town of the current Sinhalese President Gotabaya Rajapaksa. The authors identify that when Mahinda Rajapaksa, brother of Gotabaya, lost elections in 2015, Sri Lanka owed more loans to Japan, the World Bank, and the Asian Development Bank than to China. “Of the $4.5 billion in debt service Sri Lanka would pay in 2017, only 5 percent was because of Hambantota,” they explain. The piece concludes it is geopolitics of Chinese investments that is behind the debt trap propaganda, and reminds readers that Sri Lanka first approached the US and India for a loan on the project—both said no. The port is feasible for businesses more than it has any military significance as claimed by the West.

 

By: Riyaz ul Khaliq, Non-Resident CIGA Research Associate

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