China’s Belt and Road Initiative (BRI) is reshaping the world’s economic landscape, but not necessarily in the way its creators envisioned. Hailed as a blueprint for connectivity and growth, the multitrillion-dollar project has become a lightning rod for controversy, with critics accusing Beijing of using debt to control vulnerable countries. I am doing it. In countries such as Sri Lanka, Laos and Malaysia, the promise of development is often overshadowed by the realities of dependence and strategic compromise.
The Indian Ocean Region (IOR) provides a good example of how Chinese infrastructure financing has reshaped maritime geopolitics. The IOR is important for global trade and energy flows and is home to some of the world’s busiest shipping routes. For China, investing in the region makes more than just economic sense. It’s strategic. Ports such as Hambantota in Sri Lanka and Gwadar in Pakistan demonstrate how Beijing’s investments serve a dual purpose, blending commercial interests and military ambitions.
Sri Lanka’s experience with Hambantota port illustrates the pitfalls of China’s debt diplomacy. From 2007 to 2012, Sri Lanka borrowed more than $1 billion from the Export-Import Bank of China to develop the port, despite warnings that its economic viability was limited. Because the project failed to generate enough revenue, the government was forced to lease the port to a Chinese state-owned company for 99 years. Although the agreement relieved some of the immediate financial pressures, it left Sri Lanka grappling with issues of sovereignty and strategic autonomy. Hambantota, located near an important shipping route, now symbolizes how economic leverage translates into geopolitical influence.
Laos, a landlocked country with ambitious development goals, is sounding another warning. Construction of the $6 billion Boten-Vientiane Railway and other Chinese-financed projects have plunged the country into heavy debt. In 2020, the Chinese government secured a 90% stake in Laos’ national power grid in exchange for debt forgiveness, giving China control of critical infrastructure. For Laos, the deal highlights the risks of dependence, where short-term gains in infrastructure come at the expense of long-term sovereignty.
Malaysia presents a more nuanced story. The East Coast Rail Link (ECRL) project initially crystallized the challenges of linking China to the Belt and Road. The project, valued at $16.5 billion, was mired in costs and allegations of political corruption under former Prime Minister Najib Razak. However, a change in government led to renegotiations, reducing the cost of the project to $11 billion and establishing joint management between Malaysia and China. Malaysia’s recalibration of engagement shows that strategic renegotiation can reduce the risks associated with large-scale Chinese investments.
Africa is also seeing the transformative but controversial impact of China’s Belt and Road. In Kenya, the Nairobi-Mombasa Standard Gauge Railway was praised for improving connectivity but criticized for its high cost and limited financial sustainability. Meanwhile, Zambia is dependent on loans from China, putting key infrastructure such as airports and power plants at risk. These examples highlight the dichotomy of opportunity and dependence that characterizes China’s involvement in Africa.
The dual-use nature of many BRI projects further complicates the story. Initially positioned as commercial hubs, ports such as Gwadar and Hambantota have significant strategic value and have enabled the expansion of China’s naval base. This dual-purpose strategy has raised alarm among regional powers, especially in the Indo-Pacific region, where maritime security and influence are hotly contested.
China’s economic approach often creates dependencies beyond infrastructure. By flooding the local market with cheap goods, the Chinese government is weakening domestic industry and increasing dependence on imports from China. Over time, this dependency shapes domestic policy, as governments prioritize debt servicing over essential investments in public services and long-term development.
India has championed transparency and a sustainable development model as a countermeasure to China’s Belt and Road initiative. Investments such as operating Iran’s Chabahar Port and the International North-South Transport Corridor (INSTC) highlight India’s commitment to fostering equitable economic growth. Unlike China’s opaque agreements, India’s efforts aim to strengthen regional connectivity without compromising the sovereignty of its partners.
The experiences of Sri Lanka, Laos, and Malaysia reveal the complexity of China’s debt diplomacy. While the lure of infrastructure development is appealing, the long-term effects often include economic instability and reduced autonomy. The challenge for developing countries is to balance their immediate development needs with the imperative of preserving their sovereignty.
As global trade routes and maritime power dynamics evolve, risks remain high for countries caught up in China’s Belt and Road. Transparency, diverse partnerships and rigorous financial assessments are essential to ensure that the promise of development does not come at the expense of strategic independence. The future of global geopolitics will be shaped by the choices these countries make today as they navigate the complexities of debt diplomacy.
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