Despite an exhaustive body of empirical research that disproves the existence of Chinese “debt-trap” diplomacy, it continues to have salience among US officials. While these officials may find value in mobilizing the “debt-trap” narrative to support alternatives to China’s Belt and Road Initiative (BRI), they fail to recognise that this narrative denies the agency of local actors.
The “debt-trap” narrative projects U.S. anxieties about its inability to develop a coherent trade policy and absolves it from innovative policymaking. Reliance on this narrative undermines U.S. efforts to engage the Global South and exacerbates tensions in the China-U.S. bilateral relationship.
A fundamental problem with the “debt-trap” narrative is that it is patronizing. It reflects a perspective that BRI host countries are ill-informed and incapable of making sound decisions. More importantly, it elides local agency and context. Empirical research on the BRI and Chinese lending indicates that local actors play an important role in shaping the BRI’s implementation, particularly in areas such as project selection, location, construction and operation. For example, in the case of the China-Pakistan Economic Corridor, Pakistani officials were the proponents for the routes that make up the corridor, its three phases and its sectoral focuses.
Local actors in host countries are often the ones that initiate requests for Chinese investment on projects that they prioritize. This was evident in the case of Sri Lanka’s much-maligned Hambantota Port, where the Rajapaksa administration specifically lobbied China to invest in the project.
The “debt-trap” narrative also lacks salience in much of the Global South because there simply is no evidence of China repossessing infrastructure due to host countries’ inability to repay their loans. This includes the Hambantota Port, whose 99-year lease was exchanged for $1.1 billion dollars that Sri Lanka used to pay debts to Western lenders and to boost its foreign reserves. China has regularly resorted to restructuring or forgiving BRI loans in addition to becoming a lender to countries in need of financial assistance and liquidity.
While there are legitimate concerns with Chinese lending practices such as opacity and the possibility that it exacerbates the debt exposure of countries through hidden debt, they do not constitute a “debt-trap” as indicated by U.S. officials. The narrative simply does not reflect the complex reality of these countries’ engagement with China.
The prominence of the “debt-trap” narrative projects a sense of anxiety over the United States’ position in the international system, particularly the erosion of its trade dominance. The reality is that there is little appetite across party lines to pursue the kind of trade policies that would have a tangible effect on that trend, such as free trade agreements. This is why U.S.-led initiatives like the Indo-Pacific Economic Framework for Prosperity lack tangible commitments on market access and tariff reductions.
While the narrative is intended to discourage countries from participating in the BRI and accepting Chinese loans, it is increasingly evident to potential participants that U.S. alternatives are either unavailable or inadequate to address local needs. When U.S. officials mobilize the “debt-trap” narrative while promoting alternatives to the BRI and Chinese lending, they fail to recognise that participant countries do not see these initiatives as competition to Chinese offerings. Rather, they often view them as complementary. In fact, they may seek to leverage competing offers to gain greater benefits for themselves.
These points expose how U.S. reliance on this narrative acts as a crutch as well as a substitute to innovative policymaking. Misperceiving the nature of the BRI and Chinese lending undermines the possibility for cooperation in promoting economic development in the Global South — an area that is of mutual interest to the two powers.
It is time for U.S. officials to drop the “debt-trap” narrative. The reliance on this narrative actively harms U.S. efforts to engage a significant cross-section of the Global South, a cohort that will play a growing role in shaping the future of the international system. Not only does this narrative not reflect the complex reality and experiences of participating countries, but it is also viewed as an effort by the U.S. to force them to pick sides in a China-U.S. strategic competition that they want no part of.
Projected gaps in global infrastructure investments for the foreseeable future indicate that there is ample room for Beijing and Washington to pursue their respective economic interests. A better understanding of the nature of the BRI and Chinese lending reveals a higher degree of local agency and complementarity than is assumed by U.S. policymakers.
A recognition of this fact would allow for better policy formulation aimed at enabling local actors to shape Chinese activities in ways that mitigate legitimate concerns as well as serve as a foundation for greater cooperation in the economic development of the Global South.
Zenel Garcia is Associate Professor of Security Studies in the Department of National Security and Strategy at the U.S. Army War College.
This article is republished from East Asia Forum under a Creative Commons license. Read the original article.
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