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zusykses t1_jed7rm5 wrote

Reply to comment by DGIce in China calls US debt trap accusation 'irresponsible' by BubsyFanboy

If you're referring to Hambantota Port in Sri Lanka you may want to look into it a bit, because that was not an asset seizure - and never could be as it wasn't part of the terms of the loan.

Hambantota was conceived as a way to shore up electoral support for the then Prime Minister. Columbo Port manages quite nicely; there was no pressing need for a second port. The Chinese failed to understand this as the concept of needing to bribe voters is unfamiliar to them. Funny, that.

Hambantota Port is now owned by HIPG, a company that consists of 85% shareholder CM Ports (a Chinese company), and 15% Sri Lanka Port Authority (a Sri Lankan government-owned enterprise). Now, an 85/15 split doesn't sound like equity, but the terms of the agreement allow for Sri Lanka to increase it's shareholding, provided they can pay for it. It's not a fantastic deal for Sri Lanka but it did allow them to avoid defaulting on the loan. The lesson for both China and Sri Lanka is that investing in white elephants is bad business. HIPG have continued to develop Hambantota Port so there's an outside chance it may be profitable one day.

I can dig up the white paper analysis written by Sri Lankan academics (unaffiliated with either the Chinese or Sri Lankan governments) if you're interested in the details.

Edit: Found the briefing paper. It's 33 pages but you can skip to the summary on page 32.

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Master_Income_8991 t1_jedksae wrote

True it doesn't appear to be a cut and dry dept-trap. That being said I wouldn't skip the details. Doesn't sound like a dept trap but instead a trap where Sri Lanka is forced to build, host, and maintain (minority) stake in infrastructure the Chinese want to use. Dept it just a stepping stone to the actual intention. Some of the details you decided people should skip are the presence of Chinese submarines at the Chinese affiliated ports operating in Sri Lanka. Also one of the Chinese companies that went into CM ports was the company that constructed the port in the first place. Combine this with their construction of islands in disputed waters and the truth isn't too hard to see.

P.S. I don't think the Chinese are so stupid that they don't understand the concept of bribery, they are not infants.

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zusykses t1_jedp942 wrote

China didn't foist this port on Sri Lanka, and the debt Sri Lanka sought to pay off by working out the HIPG deal had nothing to do with the China Eximbank loans that Sri Lanka received - it was due to some ISBs (International Sovereign Bonds) that were due to mature; nothing to do with China. There's some valid criticisms to be made against China but honestly most of the failures here seem to be caused by financial mismanagement by successive Sri Lankan governments, unfortunately.

As far as the port being used for husbanding Chinese submarines I have no idea what you're talking about but if you've got a source I'd like to read it.

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Master_Income_8991 t1_jegzfhw wrote

It's your source, it mentions submarine hosting.

I never claimed Sri Lanka did not take substantial risk. As for the loans having nothing to do with CM ports, well it's all a bunch of card tricks. Clearly the loans had an effect on the port ownership so they became defacto related.

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