By Jacob Larsen
Josh Bramble’s article, “China’s Belt and Road Initiative: The Limits of Debt-Trap Diplomacy in Sri Lanka,” is featured in Volume 7 of the SAIS China Studies Review. Below he talks with online editor Jacob Larsen about his background, his piece in the CSR, and development finance in BRI recipient countries.
JL: All right, Mr. Bramble thank you for joining me today. We’re going to be talking about your piece, China’s Belt and Road Initiative: The Limits of Debt Trap Diplomacy in Sri Lanka that will be published in the upcoming volume of the China Studies Review.
For our first question, how do you prefer to spend your free time?
JB: When I’m not doing China-related work, I have been getting really into just walking around outside. That’s one of the things that I haven’t been as focused on in the past, and something that I’ve really taken advantage of during this past year. Going for hikes and spending more time outdoors has been great.
JL: Awesome. I can definitely sympathize, we’ve all picked up walking as a new hobby. On the more professional and academic side, what are your primary research interests?
JB: I’m very interested in how China engages with other states, particularly developing countries. I’m interested in seeing how China uses its available mechanisms to advance its political and economic goals abroad, as well as the challenges that it runs into. I think there’s a lot of focus in the US on labeling China as a revisionist state, and I’m interested in breaking that down and asking: Okay, what is actually happening – how capable is China of implementing its geopolitical objectives? Are certain events evident of a broader grand strategy, or are they better described as opportunism? And I think that a lot of conversations in the US minimize the agency of smaller states, and tend to view the CCP as a monolith without really diving into what’s actually going on in the region. I think it’s important to consider the actors that are making these decisions, and how their fragmented interests can impact how that plays out.
So, are we first labeling China as revisionist, and then interpreting everything in Chinese foreign policy as revisionist? Or, would it be better to look at the actual events and ask if China’s track record suggests that it wants to – or is able to – reshape the rules of the international system?
JL: How did you decide to write on the topic of debt trap diplomacy and how did you decide to choose the example of Sri Lanka?
JB: It’s a bit ironic. I had been reading a fair amount about how China’s development finance initiatives were setting off warning signs about debt sustainability, particularly with Sri Lanka. At first, I thought I was going to be arguing in my article that there was indeed a case of debt-trap diplomacy. When I took a closer look, however, I realized how much I needed to rethink my assumptions. Taking a deep dive into how China gained control of the Hambantota Port was an eye-opening experience that helped me figure out where the more nuanced elements of the case lie.
I picked Sri Lanka because I knew very little about the country. I wanted to focus on an area that deserved more attention, and it ended up being a really interesting case study.
JL: What is the main argument of your article?
JB: There is an idea floating around stating that China is engaging in debt-trap diplomacy. The idea behind that argument is that China is intentionally issuing high-interest loans that can’t realistically be repaid, and when it comes time to pay China ends up seizing those strategic assets.
I’m arguing is that this is a gross oversimplification, and does not accurately depict the Sri Lanka case. When we take a look at the Hambantota Port handover through a couple of international relations theories – neoliberalism and neorealism – we can see that there’s a lot of variety in the motivations of relevant actors behind the headlines. I focus on the domestic political interests from the Sri Lankan government in this case, and there’s also a number of economic constraints as well. For instance, Sri Lanka wasn’t able to obtain financing from multilateral development banks like the World Bank, because it didn’t qualify for the concessionary loan rate. Sri Lanka actually first went to India, but India said no. The initial loan was really driven by Sri Lanka’s and not China’s interests. China started out as a background player.
From the neorealist lens, there are many limitations in how much China can actually extend its power projection capabilities into the region. There are several factors limiting China’s ability to convert the port into strategic facility. For example, there’s a clause in the handover negotiations that states that the Sri Lankan government has to approve every PLA Navy operation in the port, and so far, they’ve actually denied all of those requests. And while China is so much more powerful, Sri Lanka has been able to exercise a lot of agency and contradict this narrative that China is engaging in debt-trap diplomacy.
JL: How did using the theoretical framework of neoliberalism and neorealism help you craft your argument?
JB: The neoliberal framework helped me understand that there are a lot of competing interests, and there are certain actors who potentially have an outsized role. For instance, the Prime Minister of Sri Lanka at the time had a lot of political incentives to be developing infrastructure in his hometown. When you look at the role that domestic politics plays in a country’s foreign policy, you get a much more detailed understanding of the motivations and the incentives and the reasons behind accepting Belt and Road Initiative financing.
From neorealist theory, I apply the idea of counterbalancing and the security dilemma. With the Melian dictum, there’s a saying that the strong do what they can and the weak suffer what they must. But when you introduce counterbalancing into the mix, the theoretical arguments give a solid foundation to understand the constraints that China faces.
JL: One of the things I enjoyed most about this piece is it was clearly written, and that makes it easier to apply to current events and think about the implications going forward. Based on your experience researching perceptions of debt trap diplomacy in Sri Lanka, do you predict that this narrative will persist in other BRI participant countries, and why?
JB: I do think that the narrative, or at least warnings against debt-trap diplomacy will continue. The previous administration in the US placed a lot of focus on cautioning other Belt and Road Initiative recipient countries against accepting these loans, and that momentum has continued into the current administration.
But at the same time, there’s no viable alternative that the US is providing on a similar scale. I think one way we can look at the Hambantota Port case and see how it might apply to other Belt and Road countries is understanding that each specific country has their own interests, and they’re looking at the options available to them. When the US says “don’t accept loans from China,” how are those countries going to respond? What are the different channels that they have available to them?
I think that the narrative itself will continue. I don’t see that going away anytime soon. But what I do think is that we need to be taking a different approach, by looking at it on a much more granular level. We need to ask, if a country is accepting these loans, which the US is claiming to be debt-trap diplomacy, why would they be taking those loans? Presumably the recipient state would be aware of the risks involved. We have to take into account their motivations, their interests, and why are they actually accepting Chinese financing.
JL: What is the Chinese Communist Party doing to combat these accusations of debt trap diplomacy? Do you predict that these efforts will be effective?
JB: So far, the Chinese Communist Party is using state media to tell its side of the story. For instance, in the case of Sri Lanka, there was a lot more discussion from Chinese state media about the details of the case and the strategy of the Sri Lankan government. Not just in Sri Lanka but also elsewhere, Chinese state media focuses on the positive elements of Belt and Road Initiative investments. The idea is that they’re creating jobs and they’re providing economic benefit to the host country. Of course, they’re leaving out many of the controversial aspects of these projects, such as the emphasis on using Chinese rather than local labor, and protests against Chinese investment projects.
One of the main issues is going to be transparency in loan structures. China’s Export-Import Bank doesn’t always provide transparency in their loan frameworks. It’s not always evident how certain countries are gaining certain types of concessions. This is an area that China needs to improve if it wants to combat the debt-trap diplomacy narrative.
When a potential host country is considering Chinese investment, the population of that country may be more scared of accepting Chinese loans because of debt-trap diplomacy claims. I think this issue won’t necessarily be on the political elite level, but will pertain more so to how they’re able to navigate the domestic political constraints – whether they can persuade the local population to accept the positive BRI narrative.
JL: How has COVID-19 changed the conversation around development finance in Belt and Road Initiative recipient countries?
JB: One side is that there continues to be a need for infrastructure development projects. But the flip side is the concern among developing countries that the debt they’re undertaking to stimulate their economies to address the COVID-19 shock may risk becoming a long-term issue for those countries, so it’s important to have an efficient allocation of investment during the economic recovery period. And many Belt and Road Initiative projects are notoriously inefficient, so their impact on sustainable growth is far from guaranteed. There’s going to be a lot of domestic pressure against accepting those loans, so this is definitely a big challenge for China in the foreseeable future.
Josh Bramble is a first-year SAIS M.A. candidate with a concentration in China Studies. His research interests include Chinese foreign policy, U.S.-China relations, and regional economic integration. Prior to SAIS, Josh worked in the Chinese language education field. He received his B.A. in Political Science and Chinese from the University of Pennsylvania. Josh can be reached at firstname.lastname@example.org.
Jacob Larsen is a first-year M.A. student at SAIS and is concentrating in China Studies. His primary interests are U.S. relations with China as well as China’s relations with other nations. Besides these subjects, he is an enthusiastic follower of renewable energy, electrified transportation, and climate policy. Jacob plans on working to develop nuanced and effective U.S. policy towards China to achieve goals in national security, climate policy, and other areas. In his free time, Jacob enjoys playing strategy board games and reading science fiction. Jacob can be reached at email@example.com.