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The Legend of Hambantota and China’s “Debt Trap” Diplomacy

China’s critics, largely in the U.S., often hold up the Sri Lankan port in Hambantota as the cautionary tale of what purportedly can happen when a developing country fails to pay back its loans to Beijing. Because Sri Lanka fell behind in its payments, according to the story, China, in turn, took control of the port which is all part of a larger Chinese plan to acquire assets around the world from poor, highly indebted countries.

While this narrative is widely believed among certain politicians, the so-called “debt-trap diplomacy” narrative has been debunked by a growing of scholars and analysts. There just isn’t any evidence whatsoever to support the charge.

This doesn’t mean that politics don’t motivate some of China’s lending decisions, not at all, just that the way that the debt trap story’s been told is not accurate.

This week, Eric & Cobus speak with a pair of scholars who are joining a growing number of researchers who are attempting to change the discourse on Chinese lending practices in developing countries. Matt Ferchen, a non-resident scholar at the Carnegie-Tsinghua Center for Global Policy in Beijing and Anarkalee Perera, a lecturer in international politics and economics at the China Foreign Affairs University in Beijing, recently wrote a paper that delves into the Hambantota case and then goes on to explain why asset seizures, the foundation of the debt-trap theory, is not a factor in Chinese lending to developing countries.

Show Notes:

About This Week’s Guests:

Anarkalee Perera is a lecturer at the China Foreign Affairs University (CAFU), where she teaches courses on International Relations and Economics. She also conducts research on China-Sri Lanka relations with a focus on economic development

Matt Ferchen is a nonresident scholar at the Carnegie–Tsinghua Center for Global Policy, where he runs the China and the Developing World Program. There his previous research and writing have focused on the political economy of the “China model” of development, as well as China’s relations with Latin America. Building on this background, his current projects examine how China is managing political risk in its ties to fragile states, and on the nexus of development and security in China’s foreign policy.

Ferchen is part of the Public Intellectual Program sponsored by the National Committee on United States-China Relations. His work has appeared in numerous media publications such as Foreign AffairsCaijing, the DiplomatEL PAÍS, and Phoenix Weekly, as well as in academic publications such as the Review of International Political Economy and the Chinese Journal of International Politics.

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