L aos has become the latest country to fall into China's dangerous debt-trap, Reuters reported on September 4, noting that the nation has been forced to cede majority control of its electrical grid to its giant neighbor to the north. US Vice-President Mike Pence (2018), for example, criticized China in October 2018 for using debt-trap diplomacy in Sri Lanka to establish a 'forward military base for China's growing blue-water navy'. Eight nations will find themselves . The Centre for Global Development in Washington reckons that eight belt-and-road countries are at "particular risk of debt distress", among them ones that border on China: Laos, Mongolia and. "China's 'debt trap' strategy is not in favour of African nations in the middle and long term while it will enable China to yield massive profit. "History has taught us that in the name of development partnerships . And the foreclosure of its multi-billion dollar Hambantota Port - handed over to China in 2017 - is treated as a case study in "debt trap diplomacy". The conventional account is that China lent money to Sri Lanka to build the port, knowing that Colombo would experience debt distress and Beijing could then seize it in exchange for debt relief, permitting its use by China's navy. Food prices, inflation, interest rates and the US dollar are all going up. The "debt-trap diplomacy" narrative therefore fails to capture the critical, changing role played by China's SOEs, the driving force of China's global economic expansion. Author and analyst Brahma Chellaney coined the phrase "debt trap diplomacy" in 2017 to describe how China leverages excessive debt for infrastructure projects in countries that are strategic centers for its Belt and Road Initiative (BRI). Debt trap diplomacy only works if the developing country has no option other than to sell you its geopolitically strategic assets. China lent Sri Lanka $5 billion between 2010 and 2015 for . Sri Lanka recently demanded that China return control of Hambantota port. "In response to Sri Lanka's financial crisis, China employed its . The international debt trap is resurfacing from 2020 onwards after the publication of "The Elements of the China Challenge" by the Policy Planning Staff, Office of the Secretary of State, United States. Anis Chowdhury Economic crises allow Beijing to pounce, seize assets and amplify its political influence. The "debt-trap diplomacy" idea, however, has never been convincingly argued and its application in Africa is, at best, tenuous. The negative impacts of debt-trap diplomacy This phenomenon has vast implications ranging from sociopolitical to economic aspects of a country's governance. China's debt trap diplomacy has become a major cause of Sri Lanka's unprecedented economic crisis due to the failure of the island nation to take better steps to restructure its debts in dialogue with the IMF.. Sri Lanka has become a cautionary tale of misgovernment and misfortune as the sweeping impact of the pandemic crashed the vital tourism sector, and then came the Russian invasion of . Some call this "debt-trap diplomacy": . Over the past two decades, China has built large infrastructure projects in almost every country in Africa, making some Western powers uncomfortable amid wider concerns about Beijing's intentions. - YouTube ShortsLike the IMF, the country of China also gives loans to other countries to make other countries build infrastruct. The United States' Trump administration pointed to Hambantota to warn of China's strategic use of debt: in 2018, then vice-president Mike Pence called it "debt-trap diplomacy" - a phrase . China's Debt-trap diplomacy: Context: China has announced that it is providing a $90 million grant to Sri Lanka. One such venture was Hambantota port, which was rented to China Merchant Port Holdings Limited (CM Port) for $1.12 billion in 2017. The seed of Laos's financial problems was planted during a . T hey call it China's new Silk Road.. Like the ancient system of trade routes that dates back to the Han dynasty more than 2,000 years ago, China's five-year-old "Belt and Road Initiative . Topics Covered: Effect of policies and politics of developed and developing countries on India's interests, Indian diaspora. The term 'debt-trap diplomacy' gained credence as theoretical risks turned real, with Beijing's . At least 236 BRI projects have been facing the debt related problem. Case Study in Debt-trap Diplomacy: Sri Lanka. The lease of Hambantota Port to China has become the most oft-used example of China's debt-trap diplomacy. The fears of the trap China uses against smaller nations to extract strategic benefits from them proved true when Sri Lanka defaulted on the contract to build Hambantota Port, after which a Chinese company got a 99-year lease in return. Debt Trap Diplomacy . It poses the question of whether developing countries . For example, in 2018, United States Vice President, Mike Pence, referred to the imperative to provide "foreign nations a just and transparent alternative to China's debt-trap diplomacy". "Debt trap" diplomacy has been a recurrent rallying cry for critics of China's Belt and Road Initiative (BRI) and its overseas infrastructure lending activities. Here's how China's infamous debt trap works: First, China offers to build and finance infrastructure projects in a developing country even if such projects have low expected returns or are wholly. In what Donald Trump might call a case of "fake news," China has often been accused of using "debt trap" diplomacy to lure developing nations into borrowing more than they can afford to finance. Today, that country is offering hundreds of billions of dollars in infrastructure loans to governments from Asia to Africa to Europe to even Latin America. China's 'Debt-Trap Diplomacy' Believed To Be Behind Sri Lanka Crisis, Claims Report. Through this type of Debt Trap Diplomacy, as of 2022, Angola owes China nearly $90B USD; which costs about $8B dollars a year in interest alone. Proponents of 'debt-trap diplomacy' suggest that China's geostrategic interests are served when its partners struggle with debt. Their motive was primarily strategic, i.e., creating new allies and expanding its global influence against the west, mainly the United States. This shows that, even as the China-originating COVID-19 pandemic exacts a heavy toll . Within. But it's. Opinion China's 'debt-trap diplomacy' played role in Pakistan, Sri Lanka crises. Amid food, medicine and fuel shortages, soaring prices and power cuts, many believe that China's " debt -trap diplomacy" is behind the crisis, said a media report, as . The debt trap diplomacy is based on strategically extending huge loans to economically weaker countries as a fund for developing infrastructure, which includes confidentiality clauses and a high-interest rate. China's debt trap diplomacy in Africa, 142, China initiated trade relations with African countries way back in 1970. So, what's the problem? Lack of policy control Sri Lanka's recent dealings with China offer a cautionary tale for many African countries. The term debt-trap or Chinese debt trap originated from the introduction of the Belt and Road Initiative (BRI) policy by Chinese President Xi Jinping in 2013 which aims to connect the Eurasian. But it's not the only nation facing . One of the prime example of this debt-trap diplomacy in Sri Lanka is the Hambantota port in South Sri Lanka. China employed its devious 'Debt Trap Diplomacy' to gain a strategic edge over Sri Lanka, an independent foreign policy think tank said on Saturday after Lankan Prime Minister Ranil Wickremesinghe resigned making way for an all-party cabinet to assume control of the country. The primary motive of China's debt trap diplomacy is to achieve global hegemony and exploit weaker nations. Nepal walks a tightrope as competitive diplomatic manoeuvres between China and the United States . While Hambantota is touted as a . The concept of debt-trap diplomacy, maybe more than any other, symbolizes the backlash against China's increasingly high-profile and assertive foreign economic policies of recent years. Sri Lanka is regularly depicted as a nation that fell into a Chinese debt trap because of the many public ventures financed by China. Claims that China practises "debt-trap diplomacy" in Africa distort the reality of business dealings and debt on the continent by both African nations and China, according to a new study. RIP "Chinese Debt Trap Diplomacy" (2017-2021) Debt Trap, Politics, U.S.-China, March 1, 2021, by Eric Olander, FRED DUFOUR / AFP, Four years after Indian academic Brahma Chellaney first introduced the concept of Chinese " debt-trap diplomacy ," the now widely-debunked theory appears to be flaming out. I've long argued that what others described as "debt-trap diplomacy" was in fact mostly inexperience. The World Bank says that since May 2020, a total of more than $10 . Sri Lanka has been facing its worst economic crisis since gaining independence in 1948. India on Thursday tacitly warned its neighbours as well as the Indian Ocean nations of the debt trap diplomacy of China. It exacerbated, but didn't cause economic mismanagement in borrowing nations. Lessons from Sri Lanka on China's 'debt-trap diplomacy' 2018-02-21. According to a study by the International Monetary Fund (IMF), from 2013 to 2016, China's contribution. China's Debt-Trap Diplomacy. The perils of China's "debt-trap diplomacy" (The Economist) September 21, 2018 . China is the single largest creditor to Africa, accounting for almost 20 percent of all debts owed by the continent. China has joined this and says it has contributed "the highest amount of debt repayment" of any country taking part in the plan. The ultimate objective of the global dimension of China's BRI enterprise appears to be geared toward replacing the existing political, military and economic dimension of the West's liberal. BRI is a brainchild of Xi Jinping, formed in 2013 to lure weaker nations with unsustainable development projects. Debt-trap diplomacy is one of the significant hallmarks of China's foreign policy. 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