Chinese Projects Lead to Recipient Bankruptcy

President Xi Jinping has embarked on his ambitious “one belt one road” initiative primarily to utilise China’s surplus construction capacity.
Chinese President Xi Jinping  (File | AP)
Chinese President Xi Jinping (File | AP)

China’s unprecedented, and some would say miraculously rapid, economic growth has been driven not only by rapid industrial progress, but by the manner in which its construction industry has grown over the past three decades. Roads, bridges, railway lines, power plants and residential premises have sprung up virtually overnight. But, this frenetic construction activity is now slowing down, as new demand is relatively limited. President Xi Jinping has embarked on his ambitious “one belt one road” initiative primarily to utilise China’s surplus construction capacity. This has involved building road communications across the Eurasian Landmass, from the Pacific to the Atlantic Ocean and augmenting maritime shipping, ports and power plants, across the Indian Ocean.

China’s “Belt and Road” ambitions are fulfilling its objective of utilising its surplus construction and power capabilities for projects abroad. But, Beijing’s hard commercial terms for infrastructure projects are forcing cash-strapped developing countries, into a debt trap. After having used force and violated the UN Convention of the Law of the Seas, to seize control of dozens of islands across the South China sea, China is now using its surplus economic capacities, to increasingly take control of countries across the Indian Ocean. This effort extends from Myanmar to our east, across Hambantota in Sri Lanka and Gwadar in Pakistan, to the shores of Maldives and Djibouti. 

The most wide-ranging effort in China’s ambitions to economically take over countries, using both political and economic leverages, is now underway in Myanmar. Using Myanmar’s current isolation, because of the Rohingya crisis, China is virtually insisting that Myanmar permit it to build a series of projects, enabling it to get access to the Bay of Bengal port of Kyaukpyu. China is simultaneously planning to use Myanmar territory to construct a number of projects. 

China also intends to build a hydroelectric project in this region, whose electricity will be utilised predominantly in its Yunnan Province. This project is facing huge resistance from the local population. China has also proposed an Industrial Park and other projects for exploitation of mineral resources, involving investments of over $10 billion. Moreover, Chinese involvement in thousands of acres of banana plantations in Myanmar’s Kachin State is regarded by local workers as blatantly exploitative. 

The mercantile dimensions of Chinese projects first emerged in Sri Lanka, where China has carefully manoeuvred to obtain a majority stake in the strategically located Hambantota Port. This Chinese-built port was found to have virtually no potential for normal mercantile trade. With Sri Lanka unable to repay China’s monetary contribution for building the port, China has become the majority shareholder. Hambantota could well become a base for China’s navy. The Pakistan Government and army describe the China-Pakistan Economic Corridor  (CPEC), as the cure for the country’s all economic woes. 

But, sober economists, even in Pakistan, hold that their country, already stressed to repay its present debts, is likely to end up mortgaged to China. The same pattern of acquisition by stealth by China is seen in Djibouti, where the former has a military base. Investments in infrastructure, including a rail line from Djibouti to Ethiopia, have set the stage for Chinese takeovers, similar to what has been happening, elsewhere across the Indian Ocean. India has done well by keeping its distance from any involvement in China’s “Belt and Road” project and objecting to CPEC.

Related Stories

No stories found.
The New Indian Express