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China's Debt Trap Diplomacy

Image Via The New Indian Express

Centuries ago, the Han Dynasty dreamt of expanding its Kingdom’s influence on the west. Today, President Xi Ping is carrying the vision of the empire not by invasions but by debt. In 2013, the president announced the One Belt, One Road initiative. It aimed to secure better connectivity amongst central Asian, European and African Nations through road and maritime networks. As of May 2022, nearly 70 countries had signed deals with China under the initiative.

To gain cooperation from vulnerable nations, China invests in their regional infrastructural development by offering these nations low-interest loans. The major loopholes often overlooked, exist with China’s contracts. For example, if a borrowing country faces financial distress, it may ask international organizations for possible bailouts. However, the repayment of the Chinese debt is excluded. In this way, China wants these nations to be dependent on Beijing for relief. Moreover, due to internal and external economic disturbances, these Nations face debt larger than their National GDP. When the countries are not able to repay their debt due to a shortage of monetary reserves, this forces them to lend off their key assets to China. Since 2013, the debt of these countries has increased by 20 percent.

For instance, due to several years of mismanagement of government finances, Sri Lanka showed signs of an economic crisis. In 2019, the country had to sign off a 99-year-old-lease for its key port to Beijing due to the inability to pay off the mounting debt.

In Pakistan, anti-China sentiments are on a rise. In 2013, China planned to create several infrastructural projects throughout Pakistan to strengthen its economy. In Gwadar, the Chinese were developing a port as a part of its extensive economic zone project. In recent times, attacks on Chinese personnel and growing unrest amongst the local community have forced them to abandon further developments for the project. In 2021, the Chinese government sought new development projects in Karachi.

Several analysts, India, and Japan are of the belief that the BRI project is China’s strategy to expand its military, economic and global influence to defeat the power of western nations. However, India and Japan also engage in providing infrastructural development help to other countries. Most prominently, India had extended its support to the former Republic of Afghanistan.

But is China receiving a return on investment?

In 2021, Malaysia, Kazakhstan and Bolivia had cancelled contracts worth billions with the Chinese. The governments in these countries are forced to take measures due to internal protests and charges against the Chinese for corruption and labor violations. With the ongoing war between Ukraine and Russia, and the surge in the COVID cases in China, the government is facing expensive logistical issues. The future of the BRI project is gloomy.


1. ANI, China’s bid for world domination collapsing with faltering BRI, 30th March 2022,

2. Chellaney Brahma, The Hill, China’s Debt-Trap Diplomacy,

3. Chatzky Andrew, McBride James, Council on Foreign Relations, China’s Massive Belt and Road initiative, January 28th, 2020,

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