Two countries in the neighbourhood, Pakistan and Sri Lanka, signed up for massive Chinese debt-funded infrastructure projects, slipped into economic crisis, and now are caught in political turmoil. In a third country, Myanmar, the Chinese have moved back in after the military coup 14 months ago, and are pushing projects for an economic corridor. In the Maldives too, Chinese-funded projects and loans have risen and fallen with changes of government. Estimates of the Maldives debt to China vary sharply — the opacity is typical because China has a history of hiding loans as trade credit or by routing them through special purpose vehicles. And Chinese debt isn’t cheap; interest rates seem to be about three times what other countries charge on bilateral aid.
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