Are Small Countries Becoming Victims of Chinese Debt-trap?

Are Small Countries Becoming Victims of Chinese Debt-trap?

Looking at the recent news coming from south-east Asia, questions are being raised on the events taking place in the region. Bangladesh, for example, has reportedly received huge loans from China for infrastructure development. Experts say this is a debt-trap, used under a policy by China's communist government to gain political influence and control over foreign territories. Many countries are already in Chinese debt-trap and unwillingly handing over the strategic ports to China.

Which countries are victims of Chinese debt-trap?

As per the analysis of recent years, there are almost 8 countries having huge debt from China in the name of investment and infrastructure development. They are Pakistan, Maldives, Tajikistan, Kyrgyzstan, Mongolia, Laos, Djibouti, and Montenegro.

Notably, China has already been developing and controlling Gwadar port of Pakistan, Hambantota port of Sri Lanka, and Kyaukpyu deep seaport of Myanmar. It had also offered Bangladesh a plan to develop Sonadia port in 2016. But Bangladesh rejected it by considering the same offer by India. However, recent news shows that Bangladesh is also going ahead to fall within the Chinese debt-trap.

Which countries are concerned?

Political analysts and economists, especially of USA and India, are seeing this as a threat to regional security and political stability.

China has been following a strategy called String of Pearls to make pressure on India. On the other hand, it’s trying to strengthen her stand and control over the South China Sea. The USA and South Asian countries like Vietnam, Philippines, Malaysia, and Indonesia are already involved in a dispute with China over the control of the South China Sea.

In this context, China’s political and economic strategy is considered as a threat to these countries.

How can this strategy pose a threat?

China slowly but steadily spreading her influence and reach in South-east Asia, South Asia, middle east, and south African countries. First, they give huge loans to these countries to help build infrastructures like roads and bridges, ports, and industrial zones, mostly with partnership contracts.

It also helps developing ports with a condition that such port will be under the control of China for certain years. Many ports are even taken on a long-lease and being developed. Sometimes, the small country is unable to manage large built-up like ports or fail to repay the loan and ultimately fall in the Chinese debt-trap. In this case, China demands partial or full control of such port.

Who can control China?

The biggest concern is that China can use these ports, bridges, and roads to mobilize its military and navy. Making political and military pressure on the rival countries like India, the USA, and Japan with this capacity will be easy for China. So these countries are taking it seriously and looking for ways to make a balance of power in strategic regions like the South China Sea and the Pacific ocean.

The USA has already been maintaining large military bases in South Korea and Japan compelling China to stay within limits. On the other hand, India has also developed a naval presence in Chabahar port of Iran and already having naval bases in Andaman Nicobar and Lakshadweep islands. India can easily keep an eye on Chinese movement and can have better control in war-like situations.

Chinese economic slowdown

Though China is trying to be a world power, its economy is going through the weakest periods in recent years. In the first quarter of 2019, its total debt has risen to 303 of GDP and Growth rate is around 6.2% which is the lowest of the past 20 years. Furthermore, a trade war with the USA and declining trust and interest from foreign investors are making the situation worse. The Chinese debt-trap is also known to small countries and hence avoiding it.

If China will not make good relationships with neighboring countries, it will surely see more difficulties and economic slowdown in the future. India - regional giant and superpower, the USA - world superpower, and Japan -a silent power are getting together to form a joint power to control the increasing threats from the dragon.


It’s clear that China is trying to create a new concept of power in the Pacific ocean territory and the South China Sea. However, it’s also facing tough counteractions from countries like India, the US, and Japan. Though some countries like Pakistan and Sri Lanka are neglecting possible threat from China, it is certain that they will soon see the consequences of being in the Chinese debt-trap. Needless to say that they will have no option but to look towards India or the USA for help in the future.

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