China is increasingly becoming aggressive in conquering more territories, but not in the usual way you might think. They are using debt-trap diplomacy to take over some territories of poor countries. It is crucial for you to understand how this works. Read on to learn more!
In a state visit in the Philippines, Tun Mahathir, the Malaysian Prime Minister, warned the Philippines to be “very careful” with Chinese loans. He noted that those who borrow eventually become a slave to the lender.
Moreover, the Malaysian PM further tells the Philippine government to avoid letting in a huge number of foreigners in the country as it may “disturb political equations” and influence the economy of the country.
Last year, it was estimated that the Philippines has allowed 200,000 Chinese workers in the country.
Spending tomorrow’s money
In the past decades, it is true that China has increased its foreign spending and a great percentage of this is in the form of loans.
Under President Rodrigo Duterte, the Philippines made a closer tie with China. This has led to the pacification of tension between two countries due to the territorial dispute in the South China Sea while allowing the Philippines to enjoy trade agreements and of course, a great amount of loan.
Duterte’s Build Build Build project, a multi-trillion peso initiative, is mostly funded by the Chinese government. According to reports, Chinese investment rose to 15% in the first year of President Duterte.
When Chinese President Xi Jinping visited the Philippines last year, there were a total of 29 deals – most of them are of finance and infrastructure in nature.
Looming financial debt
According to a Forbes article written in 2017, the deal we got from China can easily balloon our national debt from $126 billion to $290 billion. Now, if you take the interest rate into consideration, that could easily increase to $452 billion dollars. This debt will increase the GDP ratio to 197%, making the Philippines have the second-to-worst GDP in the world!
The article concluded:
“That understates the burden to the Philippines, as existing national government debt would also accrue interest over that time, and such interest was not included in the analysis. Dutertenomics, fueled by expensive loans from China, will put the Philippines into virtual debt bondage if allowed to proceed.”
The Philippines has borrowed more money from Japan though. However, Japan’s loans have lower interest rates compared to China’s. Moreover, because of China’s reputation of taking over territories, it is not difficult to see why we should be careful dealing with the Red Country.
Selling your country through debt
China’s loan practices are dubbed by the experts as Debt-Trap Diplomacy. Many are lured into borrowing money from China because of its easy loan terms and conditions and a huge amount of loan available.
However, when a country is unable to make repayments, China would then demand concessions or other advantages in exchange for debt relief. In most cases, China ends up winning in the deal by getting away with more natural resources or strategic assets.
Take Sri Lanka for instance. At the time they borrowed money, they were happy to improve their country’s infrastructure. Like any country who borrowed money from China, they enjoyed having extra money to stimulate their economy and let their people see that progress is happening.
But when it comes to repayments, Sri Lanka went deeper and deeper into debt to the point that they can’t keep up with the repayments.
- [Be sure to read: 17 Sure-Fire Biblical Principles about Managing your Finances]
Beijing forced them to hand over the control of Sri Lanka’s Hambantota Port on a 99-year lease just to wipe off $1 billion from its debt. As a result, China now has a port conveniently situated on the doorsteps of India, one of its greatest economic rivals.
The borrower is a servant to the lender
There are other countries who faced the same fate as Sri Lanka or who are about to get in trouble because of their debt. These include Djibouti, Turkmenistan, Maldives, Kenya, and Venezuela.
Proverbs 22:7 tells us:
The rich rules over the poor,
And the borrower is servant to the lender.
Sooner or later, the Philippines and other countries who borrowed money would become a servant to China. The Bible does not tell us anything good about being in debt. The only debt the Bible promote is the debt of loving one another.
Romans 13:8 tells us:
“Owe no one anything except to love one another, for he who loves another has fulfilled the law.”
So, if you are going to be in debt, let your debt be in the love currency.
As we look around us, we can see that the world stage is being set for the dominance of China. In Bible prophecy, we know that China would be a powerful nation at the end time. They would be the primary contributor to the 200 million soldiers who would gather together to fight the great battle during Christ’s return!
For more information on this, please read my blog, “How China is Fulfilling Bible Prophecy Today.”
China is flexing its muscle. With debt-trap diplomacy, they are legally getting more control over the world. Not only that, but China also holds a huge debt of the US. When the time of reckoning comes, China would reign powerfully over other nations.
Preparing for the future
As an individual, may we remember what the wise King Solomon told us, that the borrower will eventually become a slave of the lender. Don’t be fooled by the sweet promises of what borrowed money can do for you. Its upfront pleasure would soon pale to nothing when you start experiencing its negative effects.
More importantly, may we have the wisdom to discern world events. The Bible urges us to watch and pray and anticipate the coming of our Savior, Yahshua or Jesus Christ. When we do that, we can better avoid the dark deception of Satan.
Finally, may we all pray for God’s kingdom come here on earth. It is the only solution for all this world’s worries and problems. May God speed that day!