Wed, May 16, 2018 - Page 6 News List

China using debt for influence: report

‘DEBTBOOK DIPLOMACY’:US academics say China has lent billions to 16 nations which they cannot afford to repay, and it then strategically leverages the debt

The Guardian

“Once Sri Lanka made the initial commitment, the sunk cost and need to generate profit to pay off the original loans drove it to take out additional loans, a cycle that repeated itself until it was finally cornered into giving up the port in a debt-for-equity swap,” it said.

“This has sparked fears that Hambantota could one day become a Chinese naval hub, and sent a worrying signal to other debt-strapped developing nations,” it said.

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