China’s image as a privileged investor in Asia has suffered from the policies leading to the debt trap as well as the human rights situation in the country. Countries such as Nepal, Bangladesh and Sri Lanka are among those where Chinese investment is questioned. In Nepal, some Chinese entities have been blacklisted in some infrastructure projects due to extreme negligence and delays in works, according to reports.
Some of these aspects were also highlighted by a recently published think tank report. “There is a relatively new revelation that in addition to the debt burden, major Belt and Road Initiative (BRI) countries are also facing an ever-growing trade deficit. debt, the trade trap associated with BRI investments has shaken the financial stability of Pakistan and many other BRI countries,” said a Canadian-based think tank, the International Forum for Rights and Security (IFFRAS). .
Unlike the debt trap, the trade deficit trap is a situation experienced by countries that relied heavily on China for their investments. In this situation, a country experiences an ever-increasing trade deficit after the completion of its newly constructed infrastructure projects. According to IFFRAS, Pakistan is one such country that is also facing a serious trade balance deficit, especially with China.
Some of the projects in Nepal such as Kathmandu-Kerung Interstate Railway, Galchhi Rasuwagadhi-Kerung Transmission Line and Syafrubensi-Rasuwagadhi Road Section have fallen into disrepair, according to reports. Construction works on the 30 MW Nyadi hydroelectric project on the Ngadi River at Bahundanda in Lamjung, which was started by China’s Chachiang Hydropower Construction and Installation Company in April 2013, have been delayed.
Similarly, the Central China Power Grid International Economic Trade Organization, which delayed the project due to extreme negligence in the construction of the Hetauda-Bharatpur-Bardaghat transmission line, is also believed to be blacklisted by the Nepal Electricity Authority. (NEA). The NEA has warned Chinese contractor Kwangsi Hydro and Electrical Construction, which was awarded the 102MW Madhya Bhotekoshi hydropower project in Sindhupalchowk, of being blacklisted, breaking the contract and paying fines if the work is not completed within the next five years.
Chinese companies have delayed work not only in Nepal’s hydropower and infrastructure, but also in aviation. Pokhara Airport, which was due to be completed in 2021, is also in a dilapidated state. The Pokhara airport built by the Chinese company CAMC on a loan of 214.7 million dollars from the Chinese Import-Export Bank (EXIM) is not technically operational immediately. However, the government has already started paying 2% interest on 75% of the Chinese loan, according to reports.
China, which once promised to bring prosperity to Nepal through its investments, has now abandoned dozens of large-scale projects. In a quest for rapid progress and development, Bangladesh is falling into China’s debt trap by sponsoring infrastructure projects. As Chinese companies want to build the Metro Rail in Chittagong with their funds, it implies that after the completion of the project, Chinese technicians will continue to stay in Chittagong under the guise of maintaining the metro. It is an attempt by China to strengthen its presence in Bangladesh, particularly in Chittagong, which is strategically important.
China’s main target is the port of Chittagong, which is Bangladesh’s main port from which all of Bangladesh’s exports and imports take place. China is gradually luring Bangladesh into its trap as it is already Bangladesh’s main arms supplier. China has struck a tough bargain with Pakistan over the repayment of its loans and other investments in Pakistan.
In fiscal years 2021-22, Pakistan paid about $150 million in interest to China for using a $4.5 billion Chinese trade finance facility. In the 2019-20 financial year, Pakistan paid USD 120 million in interest on USD 3 billion in loans. (ANI)
(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)