Xi Jinping has been appointed to a third term as paramount leader of China, giving him more time to unspool his strategy to displace the post-World War II American-built global order. China’s Belt and Road Initiative has made several trillion dollars in market-rate loans to finance infrastructure projects in developing countries that Xi is seeking to influence. As it becomes increasingly clear how unserviceable these loans are, the United States must counter China’s debt-trap diplomacy by holding partner countries accountable.
China doesn’t require policy adjustments or governance standards to be met before building a project; they just provide the money. Policymakers in other countries often ask the U.S. why it can’t do the same. But the United States cannot and should not compete dollar-for-dollar with China. Our model must be based on sustainable growth. China may require little from recipient countries on the front end, but choosing to engage with China is far from cost-free. Recent events in Sri Lanka are giving the world a preview of just how pricey it can be.