China uses its Belt and Road Initiative (BRI) projects to tie other countries' economies to its own through a strategy known as "debt-trap diplomacy" and by gaining control over critical infrastructure.

By offering large loans for projects that local governments can't afford, China secures long-term economic and political leverage.

The Debt-Trap Model 

The core of China’s strategy is a financial model that can leave developing countries trapped in debt. Unlike traditional loans from Western institutions, which often come with strict transparency requirements and feasibility studies, Chinese loans for BRI projects can be opaque and carry higher interest rates.

• Bypassing Traditional Lenders: Many developing countries feel they are ignored by Western lenders like the World Bank and the IMF, which often impose strict conditions and lengthy approval processes. China steps in as a willing lender, offering to finance large-scale projects like ports, railways, and power plants with a speed that is appealing to local governments.

• The Collateral: A key detail that is often left out is the nature of the collateral. In many cases, the projects themselves serve as collateral for the loans. This means that if a country defaults, China can seize the asset, effectively gaining long-term control over a vital piece of infrastructure. The most famous example is Sri Lanka's Hambantota Port, which was leased to a Chinese state-owned company for 99 years after the country couldn't repay its loan. This gave China a strategic naval and commercial foothold in the Indian Ocean.

• A Vicious Cycle: Many of these projects are not economically viable or profitable enough to generate the revenue needed to repay the loans. This can lead to a vicious cycle where a country must borrow more money from China to service the original debt, deepening its financial dependence. The result is a country that is left with a massive debt burden and a piece of infrastructure that is now controlled by China.

Control Over Strategic Infrastructure 

Beyond just financial leverage, BRI projects are also a way for China to gain control over strategic infrastructure that serves its own economic and geopolitical interests.

• Ports and Shipping Lanes: A major focus of the BRI is the development of deep-water ports in key locations around the globe. By building or taking control of these ports, China can secure its own supply chains and create a network of naval and commercial footholds. This allows it to bypass existing maritime chokepoints and ensure the free flow of goods and energy to and from China. The acquisition of shares in more than 30 ports in the Atlantic, 25 in the Indian Ocean, and 21 in the Pacific shows the scale of this strategy.

• Resource Extraction and Market Access: BRI projects are often a way for China to secure access to essential raw materials and open up new markets for its own goods. By building railways that connect mines in Africa to coastal ports or by constructing pipelines for energy, China ensures that it has a direct line to the resources it needs to power its own economy. At the same time, the new infrastructure makes it easier for Chinese companies to export their products to new markets, creating a customer base that is economically tied to Chinese goods and services.

Undermining Sovereignty and Local Development 

A major critique of the BRI is that it can undermine the sovereignty of the countries involved and create a new kind of dependency that benefits China at the expense of local development.

• Lack of Local Jobs and Expertise: The projects are often constructed by Chinese firms, using Chinese labor and materials. This means that the local economy sees few of the benefits in terms of job creation and the transfer of technical expertise.

• Exclusion from Decision-Making: The contracts are often secretive, with non-disclosure agreements that prevent public scrutiny. This leaves local governments in the dark and without the ability to fully understand the long-term implications of the agreements they are signing.

• Shifting Geopolitical Alignment: As countries become more indebted and economically tied to China, their political alignment can begin to shift. They may become less likely to criticize China's human rights record or to align with Western foreign policy, which gives China a new form of soft power and geopolitical influence.

In conclusion, the Belt and Road Initiative is not just a development project; it is a strategic tool that China uses to build a global economic system centered on its own interests.