Navigating the Global Debt Trap: China’s Role and the Dynamics of Creditor-Debtor Relations

Abstract

The objective of this study is to investigate the following question: How legitimate are accusations that China is practicing debt-trap diplomacy? Many people have accused China of engaging in debt trap diplomacy, a claim China contests. The research project is qualitative in nature. As different aspects of the phenomenon are examined, critical and comparative methodologies are also employed. The primary concerns pertaining to the Chinese debt are its economic feasibility, the prevalence of Chinese labour, China’s increasing geopolitical sway, the excessive dependence on China, and the potential for Chinese intervention that could compromise sovereignty. Sino-optimists argue that Chinese investments in BRI route states are advantageous and a driver of economic expansion. While taking out large loans, the people and governments of the debtor nations must exercise greater caution.