Xi Jinping’s ambitious project, the Belt and Road Initiative (BRI), is tumbling down. What was originally projected  to bring prosperity for people across the world, has only left a massive debt on the shoulders of underdeveloped Central Asian countries. 

According to AidData, over 40 low-to-middle-income countries in the region have larger debt exposure to China compared to the previous years. Some countries even have debts that amount to 10% of their GDP.

The initiative originally planned to expand investment and build infrastructures in underdeveloped Central Asian countries. Later, the project was expanded to major South African countries. The total investment in the initiative is estimated to range from $1 trillion and up to $8 trillion.  

As of January 21st, Xi publicly announced that $64 billion infrastructure deals have been signed. Over 138 countries have signed the deal and the number of participating nations continues to grow . Despite this growth in number, experts express concerns about the misuse of the initiative. 

When multilateral institutions like the World Bank lend the money to the country, they must present a thorough plan outlining the ways in which the loans are going to be spent. Furthermore, the lower and middle-income countries that are involved in this relationship with China all relatively have a political system that has a weak foundation on democracy. This fact makes it much more susceptible to China’s investment. 

For instance, Pakistan, one of the enthusiastic supporters of the BRI, ranks 124th among a total of 180 nations in  the Corruption Perception Index published in 2020 . Countries such as Sri Lanka, Tajikistan, Maldives, and Laos are also positioned high in the list, and have all already taken massive loans from China. 

 

The debt-trap democracy is very simple. First, China inputs colossal loans and infrastructure investments to underdeveloped countries. When the countries are not able to repay the loans, China asks for a piece of sovereign interest in return as a medium of  debt forgiveness.

 

For example, the Guadalupe in Pakistan has been leased to China for over 40 years. The Obock military base in Djibouti has been rented for 10 years. Tajikistan had to surrender more than 1000 square kilometers of land to China. Hambantota port in Sri Lanka has capitulated to China for 99 years. 

 

Researchers claim that “China's Belt and Road Initiative has left scores of lower- and middle-income countries (LMIC) saddled with "hidden debts" totaling USD 385 billion, according to new research. ” In the end, Xi Jinping's dreams of world domination which started with hopes and dreams ends up as  nothing but myriad of debt for   innocent developing countries.  

 

Furthermore, The BRI arose as an umbrella mechanism for facilitating China’s bilateral trade with BRI partners. Currently, a large number of countries have joined the BRI since 2013. The countries have signed the Memorandum of Understanding (MoU) with China, which ensured a friendly relationship and active support for national development.  However, this only further allows them to yield more political power in international commissions such as the UN. 

 

Among others, China’s approach towards Sri Lanka is one worth paying keen attention to. In 2016, the Chinese Export and Import Bank invested $361 million in Sri Lanka. However, what made this investment in Sri Lanka  quite interesting was the fact that the entire investment was made in  one small city called Hambantota. 

 

Why? Tracing back, a similar investment has been made in 2011 by the Chinese government to a small fishing town called Gwadar in Pakistan. It was later revealed that this  nameless port has become a railway hub where transportation of $62 million value is made, of which the ownership was later transferred to China in return for  debt forgiveness.

 

China is now building at least 9 strategic ports in Hong Kong, Myanmar, Cambodia, Bangladesh, Sri Lanka, Maldives, Pakistan, Djibouti, and Sudan. When linked together, these ports form a string of pearls that  China can efficiently utilize to station warships, control shipping routes, and further dictate the trade routes. 

 

This allows them to station warships, control shipping routes, and further dictate the trade routes, forming an immense monopoly on the global trade market. There is no doubt that China intends to expand its global influence by way of the BRI.

 

 

 

 

 

 

 

 

Dylan Hyun Oh
Grade 9 
Chadwick International School 

 

 

 

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