The Diplomat: How BRI Debt Puts China at Risk
Wed November, 2021, Age: 1 week
China’s Belt and Road Initiative (BRI) has once again become a lightning rod for criticism following AidData’s newly released report, which found China’s overseas lending was worth $843 billion, including $385 billion of “un- and under-reported debt.” Media headlines seized on BRI’s “hidden debt” and news articles evoked the “debt trap diplomacy” slogan that political pundits and the Trump administration popularized in commentary critical of BRI.
Whether Beijing seeks to use debt as a tool to expand its influence and leverage over other countries remains under debate. However, what is mostly absent from the current discourse on BRI is discussion on the historically high risk plaguing all international creditors and the specter of this risk for China as it faces new challenges in sustaining its debt-fueled state-led growth model. Understanding this point can help Washington turn its stale narrative on BRI into a more convincing argument and be more effective in persuading other countries, as well as China, to shift course on BRI.