DEBT AS POWER: CHINA’S FINANCIAL DIPLOMACY AND ITS IMPACT ON RECIPIENT STATES

Abstract

This article discusses debt-trap diplomacy in detail as one of the main tools to deal with in China's foreign policy and looks at how financial books are used to broaden the power, economic, and geostrategic regions of Beijing in developing areas that are important for the future. To be sure, debt-trap diplomacy is giving of big loans and infrastructure financing to countries with weak economies under terms that may lead to dependency for long time and restriction of domestic policy autonomy thereby giving the creditor more political leverage. This article situates China's international borrowing within larger discussions about economic statecraft and asymmetric dependency and uses the case study method to draw a comparison between Chinese financial involvement in South Asia, Southeast Asia, East Africa. Scrutiny is given to the important infrastructural developments that are linked with the Belt and Road Initiative as well as the rising influence of Chinese policy banks and state-owned enterprises in molding the economic and governance structures of the recipient countries. The evaluation implies that Chinese loans, although they have been a part of infrastructural development, have also increased the risks regarding the sustainability of debts, changed the alignments of domestic politics, and given more control to the foreign influence over the strategic assets and the decision-making process. All these have led to changes in the power dynamics of the region and to the silencing of the governance issues.