Sri Lanka’s fall in China’s ‘debt trap’

A vessel berthed in a port in Sri Lanka: Picture Credit: Deneth17

Reports suggest China has started to take control of land, buildings and other facilities as part of a plan to recoup foreign debts

The Hambantota Port was handed over to Beijing for a 99-year lease due to Sri Lanka’s failure to repay a loan contracted from China for the construction of the port.
News reports are saying Sri Lanka officially surrendered control of the strategic port on the south coast to Beijing as part of a 99-year lease agreement.
Under the agreement, the port now has a 70% Chinese ownership, with Chinese companies holding 70 percent stake in the port of Hambantota.
The $ 1.3bn port was built with a loan from a Chinese state-owned bank. It was opened in 2010. But the Sri Lankan government struggled to pay off the debt, registering huge losses in the project.
Along with loans taken for other infrastructure development projects, Colombo now owes China a total of $8 billion. Also on Twitter, Brahma Chellaney, an Indian political writer and analyst, described the agreement as “debt diplomacy”, saying Chinese loans were often given in exchange for strategically important physical assets that could be “guaranteed”.
China has also given billions to Djibouti, but the tiny African nation is unable to pay back. Now China has confiscated their habour as collateral damage.
China granted loans to the Maldives, a country that could not afford to repay such loans. Now 38 percent or more of state-owned resorts are in the hands of the Chinese.
Madagascar is also in dire straits, unable to pay the Chinese for a loan, resulting in the land being used as compensation by the Chinese. Zambia is also unable to pay its China loans.
Reports are China till will take over their airports and airspace next month (including military jets). Ethiopia too is unable to repay loans, now their railroad system belongs to the Chinese, say some reports.
According to these reports, China built a city for 5,00,000 Chinese in Pakistan at a cost of $ 150 million in Gwadar as part of the China-Pakistan Economic Corridor (CPEC).
The city is set to be a gated zone, and only Chinese will live in this zone. Actually, this means that China will have a colony in Pakistan.

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