Monday, 16 May, 2022
HomeOpinionDon't panic yet, China's Belt & Road project doesn't mean it'll boost...

Don’t panic yet, China’s Belt & Road project doesn’t mean it’ll boost Beijing’s power

China is playing the role of loan shark with smaller countries in terms of GDP, increasingly isolating it globally. This is not a winning game for it.

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The global economic development initiative that China calls “One Belt, One Road” is considered one of Beijing’s major instruments in its geopolitical conflict with the US. But it’s unlikely to do much to boost Chinese power as it helps most of the world.

China is investing in fixed assets and infrastructure from southeast Asia to the Balkans and East Africa. That poses a danger to China that host countries will eventually nationalize the assets without giving China comparable value in return. It’s a lesson the US learned when it lost control of the Panama Canal and Saudi Arabian oil assets.

I was struck by a recent deal between China and Montenegro that gave China the right to access land in Montenegro as collateral, in case Montenegro does not repay certain loans. This has upset people in Montenegro, and it makes China seem like an imperialist country with territorial designs. But there’s also a more benign interpretation: China is demanding land as collateral because it knows Montenegro is not creditworthy. The loan sent Montenegro’s ratio of debt to gross domestic product to almost 80 percent, from 63 percent in 2012.

To put that in context, let’s say you heard of a loan shark who threatened to break the fingers of borrowers who did not repay. You would sooner infer that was a risky, so-so investment rather than a sure winner.

In essence, China is playing the role of loan shark, and that is not obviously the way to get ahead in today’s world. If China did claim some land in Montenegro as recompense for a bad loan, it might find holding the asset to be more trouble than it’s worth, much as Amazon decided to depart from a deal with New York because of hostility in parts of the city and state governments. If China tried to sell the land, a potential new buyer could never be sure of having enforceable title to the property.

Another problem with Belt and Road, at least from a Chinese point of view, is that China is dealing with many countries that are much smaller in terms of their GDP. There’s a tendency for small countries to renege on deals in hopes that big creditors won’t bother to make an example of them. You might think that smaller countries are easier for China to push around, and there is some truth to that. At the same time, both China and the small countries know that the small countries are not entirely masters of their fates, and so punishment strategies can be counterproductive or occasion more resentment than it is worth. Has the U.S. found it so easy to induce Honduras and Guatemala to stem the flow of migrants toward the border?

Keep in mind that debt reneging takes many forms. You don’t have to think that Montenegro or other borrowers from China will simply wake up one day and stop the payments. More plausibly, they will call up China and report that they expect financial trouble in the near future unless more loans come on increasingly favorable terms, or perhaps some previous contracts need to be renegotiated. This may not be a winning game for China. Malaysia, for instance, just renegotiated a planned Chinese rail link, with China cutting the cost by about one-third, because the previous deal became so unpopular in Malaysia.

On top of all these economic problems, China has proven remarkably poor at supplementing Belt and Road with soft power persuasive techniques using diplomatic and cultural influence. This is no accident, nor does it reflect some kind of stubborn unwillingness of the Chinese to learn to wield soft power tools. Rather, the problem is structural. Since the Chinese government does not derive legitimacy through normal democratic channels, much of its diplomacy and foreign policy have to be channeled to please domestic audiences, whether the citizens or coalitions within the Communist Party. The necessary internal presentation shapes incentives for Chinese foreign policy, and that in turn alienate the other countries China is dealing with.

Overall, it’s striking how few reliable allies China has, even though it has the world’s second largest GDP, a huge stash of foreign exchange and an increasingly impressive military. Instead, Chinese interference has become an election issue in many nearby countries, including the populous and strategically important Indonesia.

I think that Belt and Road will help much of the world develop. Let’s not panic and think that will always mean China will be in charge of what happens.- Bloomberg 

Also read: Who should be afraid of One Belt One Road? China


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  1. The agency should be leaned and executive staffs should be selected from different armed forces so that they can execute task anywhere professionally and also have skillful supportive staffs from different institutions specially IT professionals and forensic experts. under Supervision of IAS, IPS And Defense Secretary.


  3. We shold not compare ourselves again and again with The American suits. Thy cultural and administrative engagement is far differ than ours and also the targets of the intelligence agencies are also different for both Indian side and American side. Our RAW has done some successful missions while there are American counterparts where the failed while 9/11. Perhaps we need the reforms but they should not be on the track of CIA. RAW should track early talent from universities.
    We have a good structure just the need of time is to weld the poor joints. More military intelligence and IB support can give that one.

  4. Belt & roads project by Chinese is an eyewash to world ,that may be a tool to spy whole world & dominant for communist China., unless.russia& USA &other veto nations resist it, they’re going to be loosers in future to a dictator China.

  5. Not only students who have language skills, ppl who are well proficient in the field of science and technology should also be more involved into the agency. As per the words of senior officials, India is lagging behind in technological and scientific fields when compared to agencies like CIA. Researchers from various fields who would have achieved immensely should be given a chance to serve their nation. Although we have DRDO for the same, recruitment of scientists seems not to be sufficient. We Indians should also use the power of intuition for which we had been famous millions of years ago. All our Scientists used to be Sages and Seers. Meditation and Yoga must and should be a major part of training these individuals, because this is something which we are really good at. Influencing a person through mental analysis becomes very easy to those who practice meditation. This can be used as a weapon against people/ foreign agencies who have known to be experts not only in technology but also in hypnosis.

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