“There are two ways to conquer and enslave a country. One is by sword and the other is by debt.”
China has introduced its dominance all over the world through a new tool of indebting the developing countries who are in need of finance for getting developed. Warren Buffet has rightly quoted “Chains of habit are too light to be felt until they are too heavy to be broken.”
China has chained many nations with its debt-trap diplomacy. China could be kindred with the blood-sucking money lenders as they offer to finance as a helping hand to the nations but end up with high rates of interests levied on the loans; thus, enslaving the hands that were once a camaraderie.
The name which could be highlighted as the major contributor in making and maintaining this deadly debt trap in China is China’s Bet and Road Initiative (BRI). The loans and so-called financial aid by China to the specifically developing nations are a clear sign of the Silk Route China is trying to integrate through its ironic policies.
The debt book diplomacy of China in Africa could be seen as Africa is under a debt which is as high as billions with Congo under $7.1billion, Zambia under $8.7 billion, and Djibouti under debt with a 77% percent share being held by China for the year 2017-18.
China has a confidentiality clause attached to the loans it gives to the nations which could be termed as the most obnoxious thing China could do. They charge interest rates inversely proportional to the condition of the country i.e., the poorer the country higher the rate of interest. China has successfully led the nations to remain dependent on Beijing for any financial aid including during the pandemic.
The Sri Lankan crisis could be seen as a stunt of China which has again enslaved a part of the country’s home by fooling them with an aid trap contrarily “debt trap”.
Sri Lanka was persuaded by Beijing to take loans from China to fund its commercial project of the port of Hambantota. Chinese government playing the ace of the cards was able to get the country under onerous terms and feeble revenues pushing it to sell the port as collateral to China. The country could be seen as a puppet in the hands of Beijing as soon as they agree to get funds from China.
The international studies suggest the roleplay offered by the Chinese bald and road initiative which seeks to make real the mythical middle kingdom.
A new fall prey for the trap is small Laos which was signed a 25-year-long concession contract with China to give majority control over the companies to China.
China leverages loans with a grin on its face as it is well aware of the down-trending economies of the world due to the pandemic and the distress caused by it to the finances of the countries irrespectively of underdeveloped, developing, or developed.
The debts could be accounted for around 10-20% percent of the GDP of the countries that are a step for China to establish its huge Silk Route; thus, drowning all the countries into its debt lake.