Last week, Ranil Wickremesinghe, who became president of the island nation of Sri Lanka last summer, was finally in a position to succeed where his beleaguered predecessor had failed: An agreement with the International Monetary Fund (IMF) to reschedule $3 billion in debt.
The deal will provide Sri Lanka with an additional 4 years to satisfy its IMF obligations, that are crippling the nation with inflation.
It’s a superb start, but the MIF deal does nothing to mitigate the country’s real debt burden, the nearly $7.5 billion it owes to China.
You’ve heard of “failed states” like Somalia, where the central government has principally ceased to exist. After which there are “narco states” where the trafficking of medication — and sometimes people — is the chief function of the criminal gangs that run the country.
But have you ever heard of Sino states?
Positioned from the South Pacific to South America, Sino states are countries whose ports, railroads, resources – and even governments and economies – are deep in China’s pockets.
And as Beijing further extends its military and economic reach, Sino states are multiplying. “China is on the march globally, bending dozens of nations to its will,” observes Australian defense analyst David Archibald, “and this includes here in the South Pacific, where [China] is eyeing the World War II Japanese base on Guadalcanal in the Solomon Islands.” (Spoiler alert: Last 12 months China lent the Solomon Islands $66 million to upgrade their telecommunications infrastructure.)
Sri Lanka is a chief example of a Sino-state, and so is Ecuador – which currently owes China nearly $4.5 billion in unpaid loans.
This sum includes billions to the Chinese construction company Sinohydro, chargeable for Ecuador’s dismally faulty – and corruption-laden – Coca Codo Sinclair hydroelectric plant.
The $2.7 billion infrastructure giant – considered one of 4 built by China across Ecuador – is not only riddled with hundreds of cracks but is prone to systemwide failure, based on local engineers.
Countries similar to Sri Lanka and Ecuador arrived at “Sino-State”-status because Beijing is buying up natural resources, constructing infrastructure, and bribing officials at a furious pace.
Much of this effort is a part of China’s trillion-dollar Belt and Road Initiative (BRI), which is considered one of the biggest construction efforts in human history.
Via mega-projects like BRI, China intends to outmaneuver and outcompete the West.
And judging by Beijing’s canny use of loan guarantees to persuade Honduras to support China over longtime ally Taiwan last week, the PRC has no intention of playing fair anytime soon.
The US is well aware of China’s global march – a lot in order that Vice President Kamala Harris was dispatched to Africa this past week specifically so as to counter Beijing’s ever-growing influence across the continent.
Stops on Harris’ nine-day trip include Ghana, Tanzania, and Zambia, all of that are heavily indebted to China and are prone to becoming the Sino States.
Listed below are several other nations poised to develop into Sino States in the making.
Sri Lanka:
In 2002, Chinese officials got here waltzing into Sri Lanka with grand plans to construct a world port, offering $1.1 billion in loans and state-owned contractors to construct it.
Called Hambantota, the port, together with power stations and an airport, was purported to rejuvenate the island’s economy.
It was obvious why China was focused on Sri Lanka. Not only does it sit smack dab on the sea lanes that bring oil from the Middle East to China, nevertheless it’s also not far off the east coast of China’s most vital Asian adversary — India.
For reasons unknown to anyone except, perhaps, their bankers, Sri Lankan leaders signed on to Hambantota.
Nobody bothered to find out if such a port can be commercially viable, and even generate sufficient revenue to pay back the loan.
Everyone was blissful until the loan got here due, and the Colombo government belatedly realized that it couldn’t afford to make it good.
In 2017, Sri Lanka was forced at hand over the port to Chinese control on a 99-year lease.
In the years since, the country has continued to pile up debt, its population plunged into hunger, and politicians forced to beg each Beijing and the IMF for debt relief.
This is China’s debt-trap diplomacy in motion, and it has put Sri Lanka straight on a path toward Sino state-status.
A Chinese Navy vessel has recently made a port call, which was clearly a part of Beijing’s plan from the starting.
Pakistan:
China has been luring Pakistan down the road towards Sino State-hood since the days of Mao.
Beijing even handed over a nuclear weapons kit to Islamabad in the Eighties, in the most flagrant violation of the nuclear nonproliferation agreement in history.
But the effort has picked up steam since Xi Jinping announced the BRI in 2013. In actual fact, the so-called China-Pakistan Economic Corridor, which connects China to Pakistan’s Indian Ocean port of Gwadar, is the crown jewel of all the Belt and Road projects.
China promised Pakistan that its participation in BRI would transform its “all-weather ally” right into a prosperous regional trade hub. As a substitute, it has left perennially bankrupt Pakistan even deeper in debt – estimated in excess of $30 billion to Chinese lenders.
The US is not pleased: “Now we have been very clear about our concerns not only here in Pakistan, but elsewhere throughout the world about . . . debt owed to China,” said US State Department Counselor Derek Chollet during a visit to Islamabad in February.
To make matters worse, analysts report that “Chinese firms have often obtained long-term contractual rights to operate road and energy infrastructure and to gather electricity or toll fees at guaranteed high prices.”
In other words, not only is Pakistan on the hook for the original loan, but atypical Pakistanis are paying a premium to make use of the roads and power that their taxes have already funded.
With Sri Lanka to the east, and Pakistan to the West, China is adding layers of strategic depth to its encirclement of India.
Equally importantly, Beijing gains a land path to the Indian Ocean, enabling it to bypass the dangerous passage through the Malacca Strait into the South China Sea in the event of a conflict.
And, who knows, Chinese Navy ships may soon be making port calls in Gwadar.
Djibouti:
Low-key Djibouti is one other link in China’s growing chain of Sino states.
The tiny country in the Horn of Africa has no natural resources.
But, sitting because it does at the entrance to the Red Sea, it does offer one great natural advantage: Whoever controls Djibouti controls access to the Suez Canal, through which roughly half the world’s trade passes.
Desirous to command this strategic chokepoint, China has moved into Djibouti in an enormous way. Scarcely had the BRI been announced in 2013 than Chinese construction crews were busy constructing a serious port in the country.
But China also wanted control over an existing container terminal as well.
So in early 2018 Djibouti officials kicked out the previous terminal operator and brought in a state-controlled firm from China.
Barely five years later, Djibouti is now home to China’s first overseas military base – together with roughly $1.5 billion in Chinese debt.
The PLA presence is sizable and growing, and Chinese warships at the moment are making regular port calls.
Critics say that what China has done in Djibouti signals what it will definitely would really like to do with all the ports, railroads, airports and other infrastructure it has built around the world in recent times.
“China is build up the global port and airfield infrastructure – together with the political influence – that can eventually give the PLA access to facilities throughout the world and permit a world military presence,” says Col. Grant Newsham, the writer of “When China Attacks.”
“Similar to America has,” he says.
Cuba:
The island of Cuba didn’t start out as a Sino state — for 3 a long time it was a Soviet client state — nevertheless it seems to have ended up as one.
The collapse of the Soviet Union sent Castro scurrying to Beijing seeking one other Communist Big Brother.
China was blissful to have a foothold 90 miles away from Florida and quickly moved in to construct an electronic eavesdropping station on the island to spy on the US.
Trade was ramped up as well, and China is now Cuba’s second-largest trading partner after Venezuela.
In 2018, Chinese construction firms accomplished their biggest project yet with their Caribbean partner: A contemporary container port in Santiago, Cuba.
But the biggest profit that Cuba has received from its Sino-State status is a modern telecommunications system. Manufactured by Huawei, this permits the Cuban secret police — and doubtless Chinese intelligence as well — to directly monitor all communications in real-time, censoring, blocking, and locking out people as vital.
That’s exactly what Havana did when island-wide demonstrations for freedom broke out last 12 months.
As tons of of hundreds began to take to the streets, and the world began to take notice, the authorities simply shut down the entire network.
In the digital darkness that followed, the demonstrations were crushed.
One good thing about being a Sino-state is that the CCP will enable you hold onto power.
Nothing works higher than a Chinese-manufactured totalitarian kill switches to silence a preferred rebellion.
Angola:
China’s first big Sino-state play in Africa was in Angola, which in 2002 was just emerging from a disastrous 27-year civil war.
The country offered no geostrategic advantage for China, nevertheless it did have massive oil reserves.
We’ll rebuild your aging infrastructure, Beijing said, when you commit to selling us the oil at a reduction.
Some 20 years later, Angola has borrowed $40 billion from Beijing and still must pay back roughly half of it.
The winners of Angola’s civil war had first turned to the West for funding to rebuild their devastated country.
But they accepted China’s offer after Western aid agencies asked them to permit freedom of the press and commit to free elections.
China—the best friend of dictators in all places — set no such conditions. And
over the subsequent twenty years, tons of of hundreds of Chinese employees have sojourned in Angola, build up not only the oil infrastructure, but roads, bridges, ports, and housing.
Like in Ecuador, much of what China has constructed is faulty, if not inoperable.
The huge Chinese-built Nova Cidade de Kilamba, for example, was envisioned as a futuristic, modern-design “satellite town” spread across 5,000 acres 18 miles from the Angolan capital of Luanda.
1000’s of residents were expected to maneuver in, but today the place is a ghost town, with few homes occupied – and plenty of crack-ridden and falling apart.
Sino State residents not only should live with these often poorly constructed projects but back China for constructing them in the first place.
And in the event that they can’t – whether in Africa or Asia or South America – the port, railroad, or power plant defaults to Chinese control.
Worst of all, under Chinese influence, their country becomes steadily more dictatorial — similar to the original Sino state itself — the People’s Republic of China.
Steven W. Mosher is the president of the Population Research Institute and the writer of “Bully of Asia: Why China’s Dream is the Recent Threat to World Order.”