China’s neo economic imperialism shackles small countries who can never repay

Saleem Samad
Published : 17:11, Jul 20, 2019 | Updated : 17:19, Jul 20, 2019

Saleem SamadCommunist China for decades used to air propaganda on its state radio that the United States, Japan, Britain, European countries are economic imperialists, warmongers and backs autocratic regimes in the third world countries.
The political economists and several think-tanks argue that China has become an economic giant and definitely a new superpower.
There are reasons to be concerned about the dramatic rise of China as a military power in the Asia-Pacific region.
A British popular tabloid newspaper The Sun claims that China is "colonizing" smaller countries by lending them massive amounts of money, which they can never repay.
Developing countries from Pakistan to Djibouti, the Maldives to Fiji, all owe huge amounts to China. Countries around the world owe huge sums to China and have fallen into debt-trap.

Some think-tanks are calling it "debt-trap diplomacy" or "debt colonialism" offering enticing loans to countries unable to repay, and then demanding concessions when they default.

Alarm bells are ringing for Pakistan’s public debt is piling up, while a new narrative taking shape in the West that the Belt and Road Initiative (BRI) is creating a debt trap for developing economies, many are quick to link Pakistan’s ballooning debt to loans incurred under the China-Pakistan Economic Corridor (CPEC).

The BRI flagship project in Pakistan fails to address the participation of the fiercely independent Baloch people, which has scaled up armed insurrections in Balochistan. Time will explain whether the full utilization of Gwadar Port built by Chinese will be feasible.

Very recently, Rhodium Group, a US-based research organization, reviewed 40 cases of China’s external debt renegotiations.

It was found that defaulters are being pressured into surrendering control of assets or allowing military bases on their land.

Sri Lanka is the best example of being riddled with debt. Owing more than $1billion in debts to China seized control of Hambantota port for use by companies owned by the Chinese government on a 99-year lease.

The Sun article alleges that the defaulters have been pressured into surrendering assets and territory or allowing military bases on their land, thus increases its military footprint in the region. There is only one other reported case of asset seizure from Tajikistan in 2011.

Meanwhile, the United States is desperate to stop the Doraleh Container Terminal in Djibouti falling into Chinese hands, particularly because it sits next to China's only overseas military base.

Incidentally, Djibouti is home to the US military’s main base in Africa, also looks likely to cede control of a port terminal to a Beijing-linked firm.

A report from The Center for Global Development, a Washington DC-based is a nonpartisan, nonprofit think-tank offers some insight into the spreading China debt.

China, the neo-economic imperialist.Researches exemplify how infrastructure project loans to Mongolia, Montenegro, and Laos have resulted in millions or even billions in debts, which often account for huge percentages of the countries' GDPs.

Well, most of the projects are linked to the BRI and undertake work on roads and ports with part-funding from China, a bold project to create trade routes through huge swathes of Eurasia, with China at the center.

China economic empire is visible in the Pacific region, prompting fears the country intends to leverage the debt to expand its military footprint into the South Pacific.

Australia expressed alarm at this move, which would effectively increase Chinese military presence on a key gateway to Australia’s east coast.

Sydney’s Lowy Institute think-tank, which has closely monitored China’s activities in the Pacific, estimates Beijing has poured nearly $ 1.74 billion into Pacific countries since 2006.

Among the projects this money funded was the largest wharf in the South Pacific - considered capable of accommodating aircraft carriers.

China approached Vanuatu about setting up a military base. The country owes $238.32 million to China.

Tonga also carries some big debts and has already admitted to struggling with repayments.

Other big debtors include Papua New Guinea, which owes roughly $621.30 million in development and aid debt, Fiji, which owes $606.23 million, and Samoa, with a debt of  $225.77 million.

China defended its lending practices, saying they were "sincere and unselfish", and insisting it only lent to countries that could repay.

Saleem Samad, is a journalist, recipient of Ashoka Fellow (USA) and Hellman-Hammett Award, also Bangladesh correspondent of Paris based international media rights organization, Reporters Without Borders (RSF). Twitter @saleemsamad; Email: [email protected]

***The opinions, beliefs and viewpoints expressed in this article are those of the author and do not reflect the opinions and views of Bangla Tribune.