China’s “debtbook diplomacy” uses strategic debts to gain political leverage with economically vulnerable countries across the Asia-Pacific region, the US state department has been warned in an independent report. Papua New Guinea, which “has historically been in Australia’s orbit”, was also accepting unaffordable Chinese loans. While there was a lack of “individual diplomatic clout” in Cambodia, Laos and the Philippines, Chinese debt could give China a “proxy veto” in Asean, the academics said. The deal, which the report described as “opaque and contentious”, came after a decade of deepening debt ties with China. Last year India warned against China’s expanding BRI and urged financial responsibility with projects that didn’t create “unsustainable debt burden for communities”.

Source: The Guardian May 15, 2018 06:11 UTC