China’s New Silk Roads can wreck weak economies

British spy chief Richard Moore warns of ‘debt and data traps’ behind Beijing’s foreign policy goals 

China preys on the weak by hooking nations on cheap loans before harvesting sensitive data.

In a major speech, the head of Britain’s Secret Intelligence Service, Richard Moore, warned of the dangers of “debt and data traps” behind Beijing’s foreign policy goals.

The former MI6 agent talked bluntly about the threats posed by the world’s second-largest economy.

“[China is] trying to use influence through its economic policies to … get people on the hook,” Moore said earlier this week as reported by the British media.

“If you allow another country to gain access to really critical data about your society, over time that will erode your sovereignty, you no longer have control over that data,” he told an event organized by the International Institute for Strategic Studies.

Double whammy:

  • China has been accused of turning the Belt and Road Initiative into a “debt trap.”
  • These New Silk Roads include a maze of multi-billion-dollar infrastructure projects and digital links, involving at least 70 nations and 4.4 billion people across the globe.
  • The initiative is at the core of President Xi Jinping’s foreign policy.
  • Chinese loans have funded 13,427 infrastructure developments in the past 18 years, according to a major study by AidData.
  • High-tech strands make up a vast array of the BRI.
  • Intrusive surveillance technology and big data are a major part of those tentacle-like strands.
Belt and Road signatories between 2013-2021

Spiraling costs: “A growing number of policymakers in low- and middle-income countries are mothballing high profile BRI projects because of overpricing, corruption, and debt sustainability concerns,” Brad Parks, one of the AidData authors of the September study, said about China’s signature program.

Big Picture: Up to half of China’s overseas lending is for the construction of roads, railways, power plants and dams. In turn, this has kept China’s sprawling industrial sector humming.

Quick fix: “The developing world is helping fix China’s problems,” AidData’s executive director Parks said, referring to the country’s overcapacity crisis.

Delve deeper: Yet the threat of unsustainable debt has become a byproduct of the Belt and Road. Earlier this week, it emerged that Uganda was at risk of losing control of Entebbe international airport to Beijing bankers after struggling to pay back a US$200 million.

Lifeline or strife line: Billed as a $1 trillion global infrastructure lifeline for developing nations, the project has been mired in controversy, resembling a road strewn with victims crippled by massive loans.

China Factor comment: Accusations of “debt diplomacy” have been leveled against Beijing and the Belt and Road Initiative for years. China has denied them. But now, the threat of digital spying on high-tech platforms built by Chinese companies adds an extra layer of risk.