Dragon trapped in its own debt-trap diplomacy


China’s “debt-trap diplomacy” is in complete disarray. A few months ago, a report in The New York Times raised fears of Beijing losing billions of dollars in loans given as collaterals to nearly 70 nations, mostly in poor economic conditions, which the former funded to keep its ambitious strategic investment in the Belt and Road Initiative (BRI) working at a steady pace. Earlier this month, a small Pacific nation like Papua New Guinea showed why the fears were valid.

Papua New Guinea has given a fresh shocker to Beijing’s regional influence, already reeling under an image crisis. According to a top Australian daily, Papua New Guinea has told Beijing in straight, blunt words that it is not going to repay a multi-million dollar loan to China. Beijing, which is facing the biggest setback to its “Asian Giant” status in the Asia-Pacific region, is currently being cornered from all sides. If the threats from ASEAN countries and the possible attacks of US air strikes were not enough to keep Beijing rattled and frustrated, the latest from a small Pacific island nation is a real testament to China’s fast dipping economic weight and regional influence.

PNG’s Communications Minister Timothy Masiu, who is maintaining a tough stand against the growing Chinese influence, told The Australian Financial Review: “We are struggling to repay our other debts, why should we repay this loan?”

Much of this PNG’s wrath against China is credited to Australia, which has played the masterstroke against China under PM Scott Morrisson’s “tactful-diplomacy” in the Pacific region with island nations. Australia has been closely watching China’s growing influence and its money-pampering diplomacy with the Pacific nations like PNG, Fiji, Tahiti, Samoa and Tuvalu. In fact, Canberra last year compelled the PNG government to announce that it won’t take Chinese loan. But it was later taken as PNG badly needed it. However, Morrison didn’t give up.

Australia has been playing its cards perfectly in the Pacific region against China and this calls for Canberra’s greater role in the Quad and also with strategic partners like New Delhi to maintain the maritime security and regional balance. India must get Australia invited for Malabar Exercise, which will set the tone for intensive Quad working among the partners. Australia holds the key to stop China’s growing influence in the Pacific Islands where it is on an island-buying binge to set up defence infrastructure and also low-cost air strips to make strategic ends meet. Although the report published in South China Morning Post hasn’t confirmed the real motives, China’s moneyed class is out buying islands in the Pacific in the name of “personal luxury”. That may be a front for the Chinese establishment to enter and start operating for strategic reasons as the Beijing leadership and the money lenders are hand-in-gloves, including in the multi-billion dollar BRI project, currently facing economic turbulence and a near doom.

Morrison knows the fact that China’s advance in the region needs to be stopped. He understands China is gaining a strategic advantage in the poor island nation by lending millions of dollars. The pacific island nations are in dire needs of money and medical supplies to fight the pandemic and come out of economic slump, something Beijing is out to cash in on.

But Australia, which is an all-weather partner for most countries in the Pacific region, maintains a sphere of influence in the region. And that is what the US-led antiChina bloc must take note of and come out in Canberra’s support in the region to thwart the growing Chinese influence. India’s role here is to reach out to its diaspora in strategic island nations like Fiji to play the game in the region, which will soon be calling New Delhi to exert its influence in the region anyway.