Defeat Through Debt
China appears to have learned how to utilize debt as a weapon. Many third-world countries are falling into the trap. The People’s Republic’s M. O. is simple. It offers corrupt politicians pots of money for an infrastructure project which has no hope of paying for itself. China never offers a grant. Instead, it proposes a gigantic loan that has to be repaid within a certain number of years with interest. The interest is usually in the neighborhood of five percent. The recipient country is required to put up a port and/or military base as collateral. The corrupt politicians then squander part of the loan on graft. The loan is never fully repaid, and The People’s Republic ends up with another port, airport, or military installation. Those properties are generally strategically located for the projection of Chinese power and/or trade.
Sri Lanka was loaned one and a half billion dollars. When it couldn’t repay the loan, China ended up with a 99 year lease to an important port.
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