SALEEM SAMAD
Communist China for decades used to air propaganda on its state radio that the United States, Japan, Britain, and European countries are economic imperialists, warmongers and back autocratic regimes in third-world countries.
Political economists and several think tanks describe 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 and have fallen into a debt-trap.
Alarm bells are ringing for Pakistan’s public debt is piling up, while a new narrative taking shape in the West that the controversial 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 $62bn project in Pakistan links with the persecuted Uyghur Muslims in East Turkistan (now Xinjiang Province) of China and is being built through disputed territory in Gilgit-Baltistan, Pakistan-administered Kashmir, and restive Balochistan.
The ambitious project fails to address the participation of the fiercely independent Baloch people. Time will explain whether the full utilisation of Gwadar Port built by the Chinese will be feasible.
Now Pakistan will have to repay $100 billion to China from 2024 of the total investment of $18.5 billion, which China has invested on account of bank loans in 19 early harvest projects, under CPEC.
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 $1 billion 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 increasing its military footprint in the region. There is only one other reported case of asset seizure from Tajikistan in 2011.
Meanwhile, the Doraleh Container Terminal in Djibouti has fallen into Chinese hands, particularly because it sits next to China’s only overseas military base. Djibouti is home to the US military’s main base in Africa.
A report from The Center for Global Development, a Washington DC-based nonpartisan, nonprofit think-tank offers some insight into the spreading China debt.
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 centre.
China’s 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.
Critics, however, dismiss China’s lending practices explaining the Chinese were “sincere and unselfish” in mega-projects in countries that are unable to repay loans.
The change of heart from a third-world leadership to “economic imperialism” cause fear among the poor and developing countries.
First published in The News Times, Dhaka, Bangladesh, February 26, 2023
Saleem Samad is an independent journalist and a media rights defender. A recipient of the Ashoka Fellow (USA) and Hellman-Hammett Award. Twitter @saleemsamad; Email: saleemsamad@hotmail.com
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