China’s Loan Diplomacy: China is a country located in South-East Asia, whose rapidly growing economy and expansionist intentions have made the powers from India to Europe and America apprehensive. Every step taken by China is full of apprehensions for the world. Part of the reason behind this is its aggressiveness regarding its expansion.
China’s intentions are for geographical expansion from India’s Himalayan mountain ranges to the South China Sea. From Singapore to Seoul, from BRI to New York, its policies are of economic expansionism. To fulfill these ambitions, it has been using money as fuel for the past several decades, because the cycle is the same, if trade increases, wealth will increase, if wealth increases, the army will increase and if the army increases, the policies of expansionism will also increase. And if all this happens then business will also increase.
‘There are many conditions in China’s loan, all the conditions are beneficial to China’
In such a situation, China started giving conditional loans for development and expansion of infrastructure to countries located in strategically important geographical places whose economies are medium or small in the world. Among many of the conditions, a condition was also made that those countries would have to repay the loan within a stipulated time and in case of non-repayment of the loan, they would have to give some rights to China. Many countries of the world have become victims of this. The debt has increased so much that practically their economy is not in a position to return this much money. This situation is going to continue for years to come.
China is saying that its money is stuck here. The question is how will he recover this money now. One of the conditions that were made while giving the money was that in case the money is not returned, China will use the infrastructure of that country. For example, if we talk about Pakistan, a country on the Silk Route, then China had helped Pakistan in building Gwadar port. China had given most of the money to build this port in Pakistan.
Chinese company gets Gwadar port on lease for 40 years
Apparently Pakistan does not have that much money, so it handed over the entire management of Gwadar for the next 40 years to a company run by the Chinese government. China benefits most of the money coming from Gwadar port. This port was built by a Chinese company and China is also benefiting from it. According to the conditions, the state in which it is built does not get any economic benefit from this trade. The percentage of money received by the Government of Pakistan is very less compared to the total profit.
China also has indirect control over Hambantota
Something similar happened in Sri Lanka. China had given loan to Sri Lanka to build Hambantota port. The Hambantota port project has been in controversy since its inception. According to experts, this project is not such that Sri Lanka can benefit from it. The same thing happened, due to many internal and global reasons, Sri Lanka is going through a difficult economic phase these days and its economy is not in a position to repay China for many years to come, in such a situation, China is continuously using that port for military purposes. Making to use.
This pressure of China on Sri Lanka is increasing. Recently, China sent two of its alleged research vessels to this port. India expressed strong objection to this, but could not stop this from happening. Indian security agencies believe that the Chinese Navy can reach closest to India through Hambantota. China has also given loan to Malaysia. Which is a neighboring country of India. Apart from this, he is also setting up many projects in Bangladesh and Nepal.
To how many countries did China give loans?
America’s research agency AdData recently published a report. According to this report, 80 percent of the countries to which China has given loans or invested in its infrastructure are facing economic difficulties. It has been estimated in the report that the outstanding debt is 1100 billion dollars which also includes interest.
No figures have been given in this report as to how many countries have not repaid the loans, but it has been said that the outstanding payments are increasing. 1,693 BRI projects are at risk and 94 projects have either been canceled or put on hold. According to the report, in some projects, China has increased the interest rate from three percent to 8.7 percent as a penalty for delay in loan payment. In response, some experts said, China gives never-ending loans.