At the 79th session of the UN General Assembly, India’s External Affairs Minister S. Jaishankar highlighted the importance of a coordinated global effort to tackle pressing issues such as the COVID-19 pandemic, the conflict in Ukraine, and increasing unemployment. He stressed the immediate need for reforms within the United Nations to enhance its representation and effectiveness in addressing modern challenges.
Jaishankar’s comments also included a veiled critique of China’s Belt and Road Initiative (BRI), highlighting concerns over “unviable projects” that elevate debt levels and threaten national sovereignty. He pointed out that countries like Pakistan, Angola, and Sri Lanka are increasingly burdened by substantial external debts to China, raising alarm about the implications of debt-trap diplomacy.
The China-Pakistan Economic Corridor (CPEC), a flagship project of the BRI, aims to enhance China’s economic and political influence in the region but also raises strategic concerns for India, especially regarding sovereignty and territorial integrity. Jaishankar’s remarks reflect India’s commitment to multilateralism and its proactive stance in countering challenges posed by external influences in South Asia.
In an exclusive discussion with NewsX, experts shared their insights on China’s debt-trap strategy. The panel included Ambassador Manju Seth, former diplomat; Vijay Kranti, Chairman of Chase; Professor Madhav Nalapat, Editorial Director of TSG; and Robinder Sachdev, International Affairs Expert, alongside host Megha Sharma, Executive Editor.
Rising Debt and China’s Influence
Kicking off the conversation, Ambassador Manju Seth addressed the rising debt in countries across the subcontinent and Africa, highlighting China’s debt trap diplomacy and its Belt and Road Initiative. She also spoke on the significant financial burdens these nations face, particularly due to higher interest rates from China compared to the World Bank, underscoring the associated complexities and risks. She said, “One of the main reasons is that these countries also want to develop and are looking for investments, and China is ready to give it. It has deep pockets, as everybody says, so they are investing vigorously in all these countries. They are gaining strategic leverage by doing so.”
She also added , “Although their interest rates might be higher, they do not impose too many terms and conditions like the World Bank and IMF, which is a plus point for these countries. They think at least they don’t have to abide by all these conditions. However, they do not realize that most of these projects and investments made in their countries are not commercially viable. How will they repay this debt back? They do not seem to consider or want to consider this, and that is one of the reasons they are getting into the so-called debt trap with China having a hand in all this.”
Challenges in Avoiding China’s Debt Trap
Moving ahead with the dialogue, Vijay Kranti discussed the challenges faced by countries in the subcontinent and globally in avoiding China’s debt trap diplomacy. She raised concerns about the effectiveness of efforts to protect these nations from the aggressive strategies that China has employed. He emphasized the potential difficulties India may encounter in countering this expanding influence and the complexities involved in navigating this precarious situation. He expressed, “China is using the Belt and Road Initiative (BRI) in other countries to establish its military foothold. A byproduct of this is its increased voting power in sensitive United Nations organizations, including the WHO and the Human Rights Council. These developments have international ramifications.”
India’s “Neighborhood First” Policy
Continuing the discussion Prof. Madhav Nalapat discussed India’s “Neighborhood First” policy, which was introduced as a counter to China’s Belt and Road Initiative (BRI). He also elaborated on whether India has effectively communicated its intentions to support its immediate neighbors in contrast to the debt trap laid by China. Furthermore, he discussed whether these countries fully grasp the implications of aligning with India versus inviting China into their territories and said, “The world has changed a lot now, and you will see that industries are leaving China, particularly tech industries. We just got reports in the media about a Chinese nuclear submarine sinking before its commissioning, and that is a direct consequence of the technology denial regime that has been put in place by India, the United States, Europe, and an increasing number of countries in a tightening manner. So China is going through its own problems.”
He also added, “As far as the BRI was concerned, it was conceived as a plan to exchange dollars for physical assets. The Chinese wanted to understand the risk in the long run of holding dollars because they know they’re in a hostile situation with the United States and other democracies. They were aware of it, and the democracies were not, frankly. But now, of course, all of us are aware of it. India was aware of it first, and the United States has followed; Europe is now following the lead of India and the US.”
Comparative Economic Scale and Quad’s Role
Moving towards the conclusion, Robinder Sachdev discussed the comparative economic scale of China and ASEAN nations, noting their significantly larger financial capacity compared to India. He also discussed the effectiveness of the Quad in the Indian Ocean region and the Indo-Pacific, especially given that the West’s focus remains primarily on Ukraine and Gaza, and said, “Countries in Asia, like ASEAN, face historical and cultural factors, with China as a neighbor overshadowing them. They are engaged in a balancing act. As the Quad develops, it will create a network of supply chains and technology transfers, fostering infrastructure development that includes not only poorer countries but also nations like Singapore, Indonesia, and the Philippines. This integrated framework could effectively counter China in economic, security, and technology domains.”
He also said “Minister Jaishankar’s statement at the UN conveyed a strong message regarding cross-border terrorism and the illegal occupation of Indian territory by Pakistan. This message wasn’t just for Pakistan; it was also directed at China, particularly concerning the CPEC corridor that runs through disputed territory. Pakistan’s involvement in the CPEC corridor serves as a form of insurance for itself, complicating any potential Indian operations in PoJK or Gilgit-Baltistan due to the Chinese presence.”
