Governments are finally waking up to the huge financial entrapment potential involved in the Belt and Road Initiative.
Having become the lender of first resort for many low or middle income countries through the BRI, China is now the world's biggest international creditor.
The true scale of the debt - thought to be at least hundreds of billions of dollars - is unknown. Many of the loans, given out by both public and private lenders, are shrouded in secrecy.
Now, from Sri Lanka and the Maldives to Laos and Kenya, countries are struggling with BRI debt. This puts the Chinese government in a tight spot.
A real estate crisis and liberal borrowing by local governments has already created a "debt bomb" domestically - it's estimated to run into trillions of dollars. A sluggish post-Covid economy and record youth unemployment have not helped.
China has restructured BRI loans, extended deadlines and forked out an estimated $240bn to help borrowers make payments on time. But it has refused to cancel the debt.
"For China to simultaneously engage in debt write-downs overseas while domestic economic issues are not fully resolved - it will be politically challenging internally to promote that," said Christoph Nedopil, founding director of the Green Finance and Development Center (GFDC), which tracks BRI spending.
This has marred Beijing's reputation. Some critics accuse China of engaging in "debt trap diplomacy" by luring poorer countries to sign up for expensive projects so that Beijing could eventually seize control of assets put up as collateral. This was the US' accusation over the controversial Hambantota port project in Sri Lanka.
Many analysts argue there is little evidence of this, but it has heightened fears that Beijing is using the BRI to undermine others' sovereignty.
https://www.bbc.com/news/world-asia-china-67120726
