In advance of the Ninth Annual Meeting of the "16+1 Group," which kicks off this Friday in Dubrovnik, Croatia, Radio France Internationale (RFI) called China's Belt & Road project-the conference's centerpiece-"scary."
RFI is France's government-owned international radio station and operates much like Voice of America and the BBC World Service. The 16+1 Group consists of China (the plus one), and sixteen Central European and Balkan nations (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia).
Belt & Road is a Chinese government development strategy that uses infrastructure development and predatory loans to advance its foreign policy goals. As reported by RFI, former Latvian MP and now Fellow with the Latvian Institute of International Affairs, Riga, Veiko Spolitis, put it quite bluntly: "We, the free democracies in the European continent should stick together, guard our values and not allow non- democracies having their imperial schemes."
Much press coverage of China's debt trap diplomacy has focused on Asia and Africa, but Europe, too, has been victimized. There are at least two dimensions to the catastrophe these projects wreak: China's control of media; and their economic devastation.
Press freedom is a basic value in democracies, but not in China; in fact, strict media control has been a core element to the Chinese government since its inception; such that China ranks 176 out of 180 nations in Reporters Without Borders' World Press Freedom Index.
The problem for the Communist Chinese is that it does not control information almost everywhere else; information that is often unflattering in what it reveals about them. Cedric Alviani told RFI that "China'spower has to protect its own power."
China has always been criticized outside its borders and wants to recreate the same, oppressive journalist environment worldwide. Alviani is the author of "China's Pursuit of a New World Media Order for Reporters Without Borders. In fact, he said, China wants to "reshape the very concept of journalism."
Jan van der Made is an investigative journalist whose work has been at the forefront of exposing China's increasing influence in Europe. He gave RFI a specific example of how that works.
Through large sums of money, control of companies, and such "China is getting influence in local news gathering and reporting… and as a result local corruption stories about Belt & Road projects might not get as much attention as they should." In Montenegro, for instance, extensive misuse of these funds by the Prime Minister and Transport Minister were revealed only after the participants were caught on wire taps. Otherwise, the corruption would have gone unnoticed.
"The Belt &Road initiative is dressed up as some sort of Chinese contribution to the world…In fact what it really is, is a debt trap diplomacy campaign," said former British investigative journalist Peter Humphrey. He was held by the Chinese for 30 months and only released after being forced to make a (false) confession on Chinese national television. He now is a leading opponent of that same body from gaining a foothold in the UK.
In its essence, China's Belt & Road makes massive loans to countries with economies it knows are not strong enough to pay them back. When that begins to happen, China offers those nations "debt relief," as recently occurred in Sri Lanka.
When it was no longer able to repay the $8 billion it owed, China offered the relief in exchange for the strategic Hambantota port, which gave China control of an important waterway adjacent to rival India. Then when the Sri Lankans looked at what they got in return, they found that the relief was only $1 billion, leaving them with $7 billion that they're unsure how to repay. Their biggest question is what China's next demand will be.
For stronger economies, China lends money for projects that will not generate repayment income in time. As a veteran of the famed Wharton School and the US corporate economy, I have seen how that massive amount of unpayable debt ruins national economies and growth patterns; especially when people take on debt for projects that cannot generate the timely income to support the payments involved.
Development slows and individuals suffer. Not even the world's largest economy is immune, as my own country's 2007 crash came in part from too much debt.
And what of Montenegro? The massive debt it took on forced the government to raise taxes, partially freeze public sector wages, and end other benefits. And like Sri Lanka, it's still in economic trouble. The country's debt is expected to hit 80 percent of its gross domestic product (GDP), and the World Monetary Fund told Montenegro that it could not afford to take on any more.
That's a problem because the project was to be built in three stages, and only the first has been completed. It has become known as "the highway to nowhere." Like Sri Lankan, Montenegro is left to wonder what China will demand from them to reduce their debt so they can borrow some more to finish the project.
French President Emmanuel Macron issued a warning to China after it recently granted cash strapped Italy one of those loans. Europe's naivety when it comes it China is over." Macron's warning is one all potential debtors might want to heed.
The writer is an American human rights activist, journalist,
writer and lecturer
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