Let's understand one of the greatest tools of the CPC today in this thread - the debt trap diplomacy.
What is debt trap diplomacy ?
How is the CPC benefiting from it ?
Is the Belt and Road Inititative nothing but a CPC agenda to take advantage of economically vulnerable nations?
What is debt trap diplomacy ?
How is the CPC benefiting from it ?
Is the Belt and Road Inititative nothing but a CPC agenda to take advantage of economically vulnerable nations?
In debt-trap diplomacy, the creditor country intentionally extends excessive credit to a debtor country with the intention of extracting economic or political (including territorial) concessions from the debtor country when it becomes unable to honour its debt.
The most perfect example of debt trap diplomacy is the predatory lending practised by China today wherein vulnerable and/or poor countries are overwhelmed by unsustainable loans and are forced to cede control of strategic assets to Beijing.
Let's discuss a few cases in point :
Let's discuss a few cases in point :
China now claims entire Pamir Region of Tajikistan - 45% of the whole country.
It had debt trapped Tajikistan and had forced it to cede 1158 sq km of Pamir land in 2010 as Tajikistan was unable to pay back the loan.
China wants about 55000 sq km more.
wionews.com/world/now-chin…
It had debt trapped Tajikistan and had forced it to cede 1158 sq km of Pamir land in 2010 as Tajikistan was unable to pay back the loan.
China wants about 55000 sq km more.
wionews.com/world/now-chin…
Tajikistan's Gorno Badakhshan Autonomous Region located in the Pamir Mountains makes up 45% of the land area of the country but only 3% of its population.
This region is said to have rich Gold deposits among other minerals. Chinese Cos are heavily involved in mining activities.
This region is said to have rich Gold deposits among other minerals. Chinese Cos are heavily involved in mining activities.
China is trying to buy Pamir by debt-trapping Dushanbe. Tajikistan joined the Belt & Road Initiative in 2017. 350+ Chinese companies operate in the country.
As of this year, Beijing owns over half of Tajikistan's external debt. It is around 35.9 per cent of the country's GDP.
As of this year, Beijing owns over half of Tajikistan's external debt. It is around 35.9 per cent of the country's GDP.
In the past, Tajikistan has paid off debts to China by ceding mining rights & even territory like in 2010.
China hopes Pamir is next and is even publishing articles in mouthpieces to push the narrative.
This is a lesson for countries taking Chinese loans.
m.timesofindia.com/world/china/ex…
China hopes Pamir is next and is even publishing articles in mouthpieces to push the narrative.
This is a lesson for countries taking Chinese loans.
m.timesofindia.com/world/china/ex…
How important is Pamir Region strategically doesn't need to be repeated. It is the gateway to Central Asia and is very important for Chinese CPEC too.
China is building an airport at Tashkurgan near the Tajikistan-Afghanistan border. That is now a growing cause of concern.
China is building an airport at Tashkurgan near the Tajikistan-Afghanistan border. That is now a growing cause of concern.
DJIBOUTI :
Chinese loans account to 77% of the country's total debt.
Djibouti owes over 80 percent of its GDP to China and in 2017, became host to China's first overseas military base, giving China its first naval base in the Indian Ocean Region.
Chinese loans account to 77% of the country's total debt.
Djibouti owes over 80 percent of its GDP to China and in 2017, became host to China's first overseas military base, giving China its first naval base in the Indian Ocean Region.
ZAMBIA :
US $7.4 billion of the country's total $US8.7 billion of debt is owned by China.
The Zambian Govt was in talks with China about total surrender of state electricity company ZESCO as debt repayment since Zambia has defaulted on multiple Chinese loans for infra projects.
US $7.4 billion of the country's total $US8.7 billion of debt is owned by China.
The Zambian Govt was in talks with China about total surrender of state electricity company ZESCO as debt repayment since Zambia has defaulted on multiple Chinese loans for infra projects.
NIGERIA :
US$3.1 billion of the country's total US$27.6 billion foreign debt is owned by China.
Nigerian financial publication Nairametrics warned of falling into a Chinese debt trap given Nigeria's notable problems with corruption.
US$3.1 billion of the country's total US$27.6 billion foreign debt is owned by China.
Nigerian financial publication Nairametrics warned of falling into a Chinese debt trap given Nigeria's notable problems with corruption.
SRI LANKA :
The state-owned Chinese firms China Harbour Engineering Company and Sinohydro Corporation were hired to build the Magampura (Hambantota) Port for US$361 million which was 85% funded by China's state-owned Export-Import Bank at an annual interest rate of 6.3%.
The state-owned Chinese firms China Harbour Engineering Company and Sinohydro Corporation were hired to build the Magampura (Hambantota) Port for US$361 million which was 85% funded by China's state-owned Export-Import Bank at an annual interest rate of 6.3%.
Due to Sri Lanka's inability to service the debt on the port, Sri Lanka had to cede it to the Chinese state-owned China Merchants Port Holdings Company Limited on a 99-year lease in 2017.
This is a cause of concern for India as the port might be used as a Chinese naval base.
This is a cause of concern for India as the port might be used as a Chinese naval base.
Besides, China has given big loans to the Malaysian government of Najib Razak (whopping US$22 Billion to Malaysia), Kyrgyzstan, Laos, the Maldives, Mongolia and to build a national highway in Montenegro as part of the Belt and Road Initiative.
In March 2019 Indonesia & China outlined an investment plan worth US$91.1 billion for 28 projects under the Belt & Road Inititative.
Now China is claiming Indonesian waters in the Natuna Sea.
It has somewhat awakened Indonesia to the Chinese threat.
Now China is claiming Indonesian waters in the Natuna Sea.
It has somewhat awakened Indonesia to the Chinese threat.
How Pakistan has already received over 25 Billion US $ in Chinese loans for the CPEC is something that doesn't need to be spoken here as most of us are already aware.
A lot has already been said on what's happening in Nepal. It is something I won't include here in this thread.
A lot has already been said on what's happening in Nepal. It is something I won't include here in this thread.
Myanmar, Indonesia, South Africa and Nigeria are realizing the effect of Chinese easy money on their sovereignty.
It is time for other countries to look at the example of Tajikistan to realize that Chinese loans will end up in a compromise with sovereignty.
It is time for other countries to look at the example of Tajikistan to realize that Chinese loans will end up in a compromise with sovereignty.
It is time for institutions like IMF and World Bank to look at how China is indulging in blatant debt trap diplomacy and is even brazenly gobbling up Territories and companies of its debtors.
World Bank, IMF and other institutions must make easy credit available.
World Bank, IMF and other institutions must make easy credit available.
As for India, India has already opened Lines of Credit for various countries with which it values relationship.
The cooperation has to increase in terms of quantity.
In delivery of commitments too, improvement is required.
Other big democratic nations too need to come forward.
The cooperation has to increase in terms of quantity.
In delivery of commitments too, improvement is required.
Other big democratic nations too need to come forward.
*Initiative Misspelt due to inadvertence !! 🙏
