“Why Unsustainable Chinese Infrastructure Deals Are a Two-Way Street.”

Matt Ferchen and Anarkalee Perera
Publication Date: 
July 23rd, 2019

Warnings about China’s debt-trap policy, pursuant to which it allegedly signs unsustainable deals with countries involved in its Belt and Road Initiative to obtain assets, became prevalent after 2018 following the Sri Lanka’s Hambantota Port fiasco. This narrative assumes China has a strategic plan when the reality may be far more complex. Countries may embrace problematic projects, borrow too much for them, or have project fiascos not because of Chinese malfeasance, but because of domestic imperatives to overborrow, factors driving Chinese actors to push/accept economically unwise projects, or a lack of Chinese knowledge. The Sri Lanka case illustrates these points.

This report originally appeared at: Matt Ferchen and Anarkalee Perera, "Why Unsustainable Chinese Infrastructure Deals Are a Two-Way Street," Carnegie-Tsinghua, July 23, 2019, https://carnegietsinghua.org/2019/07/23/why-unsustainable-chinese-infras...