Perhaps this reveals some personal bias on my part, but I found Hong Yu’s piece on the motivation behind China’s One Belt One Road (OBOR) initiative to be overly effusive while overlooking some of the more problematic aspects of the endeavor. Yu’s article makes brief reference to preferential loans for infrastructure in Africa and South Asia but doesn’t really interrogate the notion that China is engaged in serious debt diplomacy in the developing world. Yu frames OBOR as an initiative to foster economic cooperation and connectivity and increase trade and investment but focuses little on China’s predatory lending practices.
This is an old Foreign Policy article, but it offers some emblematic examples of Chinese debt diplomacy:
“Unable to repay China for a loan used to build a new port in the city of Hambantota, in 2017 Sri Lanka signed over to China a 99-year lease for its use, potentially as a strategic base for China’s navy. In Djibouti, public debt has risen to roughly 80 percent of the country’s GDP (and China owns the lion’s share), placing the country at high risk of debt distress. That China’s first and only overseas military base is located in Djibouti is a consequence, not a coincidence.”
Beyond its problematic and non-transparent lending practices, China is also promoting a “Digital Silk Road.” This is ostensibly to enhance digital connectivity in the developing world and expand the reach of Chinese tech and telecom companies, but it is easy to see how a Digital Silk Road might undermine democracy and human rights, particular given the PRC’s recent actions in Hong Kong and toward the Uighurs. I find myself wondering: Will the world face a “Digital Curtain” in the future?
But perhaps I’m just another American engaged in unnecessary handwringing over the rise of China.
Shana,
As we discussed during last night’s class, you are neither exaggerating nor exhibiting bias; you are stating facts! While on the one hand, it is probably a good thing (on the whole) that the Chinese are funding development projects in other countries, it is decidedly NOT a good thing if they are simply adding to the debt burden of these countries and thereby creating either long-term debt dependence or obtaining control of foreign assets (e.g., ports, railroads, etc.) that they financed and then repossessed.
There has been growing criticism of these Chinese practices, and of the fact that they do not conform to international standards for the terms of their foreign aid. Whether or not that will alter their behavior remains to be seen!
(Sorry that I was slow in commenting on this blog post, but I mistakenly thought it was for the prior week when we had no class.)
–Professor Wallerstein