Of China creating Debt Traps....

Sri Lanka’s handover of Hambantota Port to Beijing illustrates how China turned an ally’s financial woes to its advantage: NYT

China’s acquisition of the strategic Hambantota port from Sri Lanka has given it “control of a territory” just a few hundred miles off the shores of India, highlighting its “debt trap” and ambitious use of loans to gain influence around the world. An article in The New York Times about Sri Lanka’s handover of the Hambantota Port to China in December 2017 illustrates how China turned an ally’s struggles to its strategic advantage.

The report said that feasibility studies had found that the Hambantota port would not work and “frequent lenders” like India had refused to provide loans or assistance. “However, every time (then president Mahinda) Rajapaksa turned to his Chinese allies for loans and assistance with the ambitious port project, the answer was yes,” it said.

The investigative report said that over years of construction and renegotiation with a Chinese firm, the Hambantota Port development project distinguished itself mostly by failing, as predicted. 2012, the Colombo Port, which had room for expansion, handled 3,667 ships while only 34 vessels docked at Hambantota.

With Rajapaksa being voted out of office in 2015, Sri Lanka’s new government struggled to make payments on the debt. “Under heavy pressure, the government handed over the port and 15,000 acres of land around it for 99 years in December last year. The transfer gave China control of territory just a few hundred miles off the shores of rival India,” the NYT article said.

“The case is one of the most vivid examples of China’s ambitious use of loans and aid to gain influence around the world – and of its willingness to play hardball to collect,” it said.

“The only way to justify the investment in Hambantota is from a national security standpoint – that they will bring the People’s Liberation Army in,” India’s former foreign secretary and NSA Shivshankar Menon was quoted as saying in the report.

“They approached us for the port at the beginning, and Indian companies said no,” said Menon, who served as India’s foreign secretary and then its national security adviser as the Hambantota port was being built. “It was an economic dud then, and it’s an economic dud now.”

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