Communist China accused of waiving loans in Africa as part of ‘debt-trap diplomacy’

It was reported that Communist China recently initiative to forgive 23 interest-free loans to 17 African countries and redirect billions of its International Monetary Fund reserves, which divided analysts over whether this surface-level act of generosity is a public relations exercise or another case of “debt-trap diplomacy” playing out in real-time.

Critics have long accused the Communist China government of engaging in debt-trap diplomacy, a predatory lending practice that lures poorer countries to take out loans for expensive infrastructure projects that are doomed to fail. When borrowers are unable to repay their debt, communist China intervenes and seizes strategic assets to reinforce its international domination.

Hambantota is one of the most quoted cases in the diplomacy of China’s debt trap. The government of the Chinese Communist Party (CCP) pushed Sri Lanka to borrow money from Chinese banks to pay for the project, which was unlikely to achieve any real commercial success. China has added harsh conditions and charges that have left Sri Lanka in default. The CCP then demanded the port as collateral, forcing the Sri Lankan government to give it up to a Chinese company.

The Trump administration used the incident to warn of Communist China’s strategic use of debt, and in 2018 former Vice President Mike Pence used the term “debt-trap diplomacy” as evidence of communist China’s ulterior motives. Former Attorney General William Barr also used the Sri Lanka case to argue that China was a bad faith lender and claimed that it was “loading poor countries up with debt, refusing to renegotiate terms, and then controlling the infrastructure itself.”