Opinion / Politics

China’s Predatory Debt-Trap Diplomacy Threatens the South Pacific

China'sOver the July 4 weekend, China’s navy conducted military exercises in the South China Sea, near disputed islands over which Beijing has claimed economic sovereignty. The United States, which, like almost every other country on Earth, rejects China’s claim to the islands, responded with a show of force of its own, sending two aircraft-carrier battle groups to the area.

The world tends to focus most intensely on visible military manifestations of China’s aggressive regional strategy such as last weekend’s standoff. But the economic underpinnings of the strategy are just as important. The Chinese Communist Party has taken a rapacious, neo-colonial stance toward impoverished South Pacific countries, and the U.S. and its regional allies are starting to wake up to the dangers this stance poses.

President Xi’s Jingping’s regime uses debt and related pressure to trap a range of low-income countries into doing its bidding. The main vehicle for this tactic is Xi’s Belt and Road Initiative, a trillion-dollar program meant to project Chinese influence through a string of investments abroad. The basic idea is to invest loads of Chinese cash in countries that can’t afford to turn it down, and then leverage the resulting debt to secure control of strategically important infrastructure in those countries. It has worked swimmingly in Sri Lanka, where China now controls a major strategic port, and in Djibouti, where it now controls a port and a military installation.

The People’s Republic of China (PRC) is currently attempting to repeat the same pattern in the South Pacific. Take Tonga, a Polynesian nation of 106,000 that spans an archipelago of nearly 170 islands in the South Pacific, only one in five of which is populated. In 2018, the country’s GDP was about $450 million, or roughly what Texas A&M spent to renovate its football stadium a few years ago. It is a tiny, impoverished nation. It is also one of several countries caught in the PRC’s diplomatic debt trap: It owes China about $125 million, a little over a quarter of that GDP total.

Tonga’s plight is instructive. In 2006, anti-government, pro-democracy riots nearly destroyed the capital, Nuku‘alofa. The riots capped years of internal frustration with the Tongan royal family and its crony-capitalist government. After the unrest died down, Beijing stepped in to “help.” Between refinancing and interest, an initial $65 million loan had nearly doubled in cost by 2018, when Prime Minister Akilisi Pohiva organized several other South Pacific nations to seek debt relief from Beijing. By then, eight South Pacific nations had accumulated more than a billion dollars in debt to China over the prior decade.

At the time, Pohiva expressed concerns that debt forgiveness would come at the cost of strategic assets, as it had in Sri Lanka and elsewhere. Yet he had no choice: Tonga ended up joining the Belt and Road Initiative in exchange for a five-year deferment of the debt. China has its hooks in his country, and there’s no telling what concessions it could extract in the future.

The story has been similar in Kiribati, another remote South Pacific island chain. Kiribati occupies 32 atolls that straddle the equator and the international date line, roughly half the distance between Australia and Hawaii. Kiribati’s average elevation is just two meters above sea level, and it’s thought to be in danger of vanishing into the ocean as a result of climate change. It reportedly sought loans from Taiwan to purchase commercial aircraft to facilitate inter-atoll travel and the development of Kiritimati, the largest coral atoll in the world, as a tourist destination. In September 2019, after Taiwan declined, the country walked into China’s arms, ending its diplomatic recognition of Taiwan. And in January of this year, its prime minister, Taneti Maamau, signed on to the Belt and Road Initiative, in an agreement that would give China access to key deepwater ports off Kiritimati.

Reprinted with Permission from - National Review by - Therese Shaheen

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PaulE
1 month ago

China’s Belt and Road initiative has been an unqualified success for China’s expansion of both power and reach around the world. While we have been tied up in the Middle East fighting a bunch a 7th century throw-backs armed with modern weapons for 20 years, China has been effectively buying up whole countries around the world on the cheap. To date they have gained control over almost 90 countries by offering to finance and build, with Chinese labor brought in under PLA troop guards, so there are NO jobs for the locals, massive infrastructure projects. All by simply offering ultra… Read more »

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