How real is the China ‘Debt Trap Diplomacy’? | Zain Khan & Hussein Askary

Tactical Talk (Update) Panic is spreading in the trans-Atlantic area dominated by the City of London and Wall Street financial interests, over two factors: 1. That its bankrupt monetary and financial system, including the Euro system, is clearly in the final phase of its disintegration process; 2. That an alternative, which the Chairwoman of the International Schiller Institute, Mrs Helga Zepp-LaRouche has described as “a new paradigm” in international economic and political relations, has spread over large swathes of the planet thanks to China’s Belt and Road Initiative (BRI), the BRICS nations’ new development policies, the Shanghai Cooperation Organization’s expansion, the alliance between the China-spearheaded BRI and the Russia-led Eurasian Economic Union, and the China-Africa economic cooperation process. President Trump’s repeated insistence that he has excellent relations with Presidents Putin and Xi Jinping, and that it would be a “good thing, not a bad thing” for the U.S. to have China and Russia as a friend, simply adds to the panic of the geopoliticians of the British Empire, and is the root of the frantic and fraudulent “Russiagate” campaign to remove him from office.

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The corrupt Western mainstream mass media, hired academic institutions and think tanks are inventing new lies, packaged as academic studies, and coining new terminology that is then used by powerful political institutions in a fruitless attempt to stop the new paradigm. While the new paradigm is unstoppable, these circles intend to keep the U.S., and the EU countries, at least, away from it, thus preventing mutually beneficial cooperation between East and West. Russia has been a permanent target of defamation and economic sanctions, but China is gradually beginning to receive the same treatment. The latest such lie that is being peddled through academic and quasi-academic institutions to target China’s BRI is that China’s sinister plan behind the BRI is to set debt traps to poor and developing nations. “Debt trap” and “debtbook diplomacy” are the new catch-phrases that are now frequently used to portray China’s policies.

The term “debtbook diplomacy”—with the meaning that China builds influence over other nations by deliberately causing them to take on more debt than they can handle—was coined in a report commissioned by (and custom designed for) the U.S. State Department and written in May 2018 by Sam Parker of the Harvard Kennedy School’s Belfer Center for Science and International Affairs. This report was then used by the U.S. State Department to ring alarm bells all over the world about the potential impact of China’s Belt and Road Initiative. But the report’s author, Sam Parker, is not known to have any expertise in economics or to have written anything about the economies of China or other developing countries.

From the outset, Parker clearly exposes his Mackinder-inspired British geopolitical worldview, writing: “Debtbook diplomacy is by itself neither an economic tool nor a strategic end. Rather, it is an increasingly valuable technique deployed by China to leverage accumulated debt to advance its existing strategic goals. Three strategic targets for China’s debtbook diplomacy would be: filling out a ‘String of Pearls’ to project power across vital South Asian trading routes; undermining U.S.-led regional opposition to Beijing’s contested South China Sea claims; and supporting the PLAN’s [People’s Liberation Army Navy] efforts to break out of the First Island Chain into the blue-water Pacific.

Are the conclusions he reaches required by a sober analysis of China’s actions, or are they put forward for reasons that are themselves geopolitical?

Hambantota: the Only, and Deceitful Example

China’s relationship to the Sri Lankan port of Hambantota is always held up as a “template”, as Parker suggests, of how China intends to treat other nations. But, Hambantota is the only example that the critics of China can come up with. The three stages of the development of the project, including the building of a container terminal, cost a total of US$ 1.1 billion. It was not a Chinese idea, but a Sri Lankan government plan to ease the congestion at the only major port of the country, the Colombo Harbor Port, and building an industrial zone in its vicinity. This plan dates back to 2002, long before the BRI was conceived. Building power plants and industrial zones to foster economic activity was part of the “Regaining Sri Lanka” economic program. Another case of glaring “lying by omission” is considering Hambantota Port out of its national and global contexts. The critics assume, first, that Sri Lanka will always continue to be a poor country with no industries, agriculture or other modern economic activities that necessitate the existence of modern infrastructure, such as this port. Second, given the fact that most of the commercial shipping lines between East Asia and Europe are passing a mere 6 to 9 nautical miles south of the southern coast of Sri Lanka, a fact that is rarely mentioned, but which makes clear the potential benefit from this huge volume of global trade passing through these waters but without affecting the economy of Sri Lanka. This port holds a great potential for future development of shipping services, transshipment, and building industrial zones benefitting from the available transport means to world markets.
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