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Debt-Trap Diplomacy, Chinese Infrastructure Loans


If you are like me, you are probably scratching your head and wondering; What's China's long game? Why are developing nation's being roped into infrastructure loan deals by China? And why are they accepting these deals? The answer partly lies in the early attitudes to Africa by the United States and European institutions like the IMF and Chinese strategic plans to relieve the United States of its global influence.

Historically China has never sort world domination, after all the Mongol empire was arguably the greatest empire in the world during the 12th and 13th century yet it stopped its advance at the European frontier. Some historians say weather halted the Mongols, other say it was internal power struggles. I like to think the Mongols understood that even if they could invade and capture Europe holding a vast empire over such a great distance would be impossible. We must also consider that the Crusades were taking place on the Mongol borders, Kublai Khan would have no doubt heard of European conquests in the holy land, quite simply it would have been suicidal to continue towards continental Europe and face unknown military challenges not to mention the culture barrier. We can easily see similarities with modern day China in their approach to the Western countries in terms of non-interference, especially the United States.

The map shows US military bases and missile sites around China.

China's attitude however is changing, the Chinese are increasing their military activity in the South China sea, they are being more vocal on Taiwan and recently mainland China attempted to introduce the fugitive offenders amendment bill that sparked the Hong Kong protests. China is now the largest holder of US debt and more significantly the largest holder of African debt. In this article from the Economist, we see Xi Jinping acknowledging that by 2050 China needs a world class military to regain supremacy in the Western Pacific. The recent trade war with United States in particular Donald Trump's persistence to reshape the existing trade agreement with China by levying tariffs on Chinese goods keeps reinforcing the idea that the United States have China in their gun sights. The question remains is this new China feeling threatened by the United States? Is this why we are seeing a more dominant China? I like to think China is realising its potential as a super power and is daring to think it could be the successor to the United States as the world's greatest super power.

China understands like the Mongols of old, the West is off-limits. It is highly unlikely we will see a direct confrontation between the US and China but we will see a battle for strategic global influence. One lesson we can all take from history is that super powers developed due to strategic global influence. US influence in the Middle East led to Oil in US Dollars and US control of Oil prices. US influence in Africa led to a string of coup d'etats in the 1990's that toppled the Soviet Union's loyalist African governments and replaced them with US and French friendly democratic governments. US military action in South East Asia led to end of the communist regimes in Vietnam, Cambodia and the division of Korea. These strategic actions have allowed the United States to increase its strategic global influence.

China is seeking to remedy this imbalance of power by increasing its own influence through the China one belt and road infrastructure projects. Africa is a resource rich continent with very poor infrastructure due to lack of skilled labour after many years of colonisation. African countries for many years were considered corrupt, dangerous and politically unstable; excluded from accessing lucrative debt and capital markets most African nations were simply resigned to stagnation and poverty. European and US corporations backed by military support extracted large number of resources and if African leaders protested they were simply replaced and accused of corruption. Organisations like the IMF insisted African countries be granted aid but with strings attached, this article by the Guardian illustrates the challenges with such a deal. Africa was the West's biggest cash cow.

China understood Africa's position and its turbulent relationship with its former colonial masters; they only needed to offer a better deal and yes, it was a better deal, or so it seemed. Today Chinese infrastructure loans to Africa are in the billions of Dollars, Africa's debt to China in 2016 was standing at $30 billion and failure to pay means your ports, airports and your railways all belong to China as Sri Lanka found out. China is lending huge amounts of money to African countries to build key railways, ports, airports and bridges that they can later repossess and in so doing end up cutting off strategic US and Nato military bases located in Africa from their supply lines.

US and foreign Military bases in Africa

This is not just happening in Africa but in Asia too and it will seem the West is not really off the table. Italy has also signed on to the belt and road initiative as this BBC article sights. No matter your opinion on China it is clear that the wheels are in motion and China is on a course towards global domination and the belt and road initiative is the key to achieving it. The US is continuing to militarise in the African continent, only time will tell what the next move will be. The debt-trap diplomacy that China has engaged in has arisen as a necessity rather than a simple idea to trap Africa in debt. A necessity if they are to achieve global dominance.

#China #InfrastructureLoans #Africa #Debt #Asia

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