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  • Writer's pictureXiaodong Fang

China's "debt-trap diplomacy": an externalization of its domestic frauds.

China performs the ‘debt-trap diplomacy’ in many areas of the world, particularly in Africa. According to a report of the China Africa Project, "China knows that these countries won’t be able to pay back the loans and will instead recoup their losses either through seizing national assets or gaining leverage over these poor, indebted countries so they fall into China’s political orbit."

The scheme is similar to China's domestic"microcredit scam." That is, the frauds targeting the Chinese people who are with assets (e.g. real property; cars; or credits to make loans) but badly need short money. The illegal moneylending aims at taking the assets of those borrowers rather than making interests from the loans. A report in 2018 said that "thousands of victims across the country into a microcredit scam that involved over 100 million yuan (US$15.6 million)."

The behavior of the Chinese government on the targeting countries is no different from the local frauds targeting its innocent people. At home, the Chinese authority does not facilitate victims of the domestic fraud to take back their money or properties. Instead, China deployed huge police force to prevent fraud protest. Peaceful petitions and protests were crackdown by the Chinese government. For example, one middle-aged man, who had lost 200,000 yuan (US$29,000), travelled all night to reach Beijing to protest, was caught and sent to black jails by the local authority.

Apparently, what the Chinese government did internationally was an externalization of its domestic frauds. The malicious "debt-trap diplomacy" should raise the attention of the international society. Free world leaders, especially the U.S. should prevent China from externalizing its bad practices and harming the rule-based world order.


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