- The Washington Times - Tuesday, July 17, 2018

ANALYSIS/OPINION:

That, however, was then. In today’s world others are not as willing as they once were to tolerate the sort of overt aggression that took place during the days when Nazis and Communists were running amok, forcing aggressor nations to find subtler ways of taking over their neighbors.

Thus, though Moscow might like to rebuild the empire that collapsed along with the Soviet Union it is encountering more pushback than perhaps expected when it retook Crimea and essentially occupied eastern Ukraine. Sanctions and condemnation may have proved too little and far too late for Crimea and eastern Ukraine, but one has to think that Moscow will think twice before going after more of its neighbors.

Watching all this, the ever-inventive Chinese leadership in Beijing seem to have come up with new and intriguing ways of expanding their sway in Asia. Failing in various attempts to claim islands that aren’t theirs, they simply decided to build their own astride sea lanes to which they have no legal, moral or other claim, declare them Chinese territory and provision them with hardware and troops to “protect” them.

The West and China’s neighbors were initially flummoxed but are beginning to come together to let Beijing know that they are prepared to push back and are refusing to recognize their attempt to exercise control over traditionally free sea lanes. The result has been an increase in tension and the possibility of armed conflict.

But Beijing has other cards up its sleeve. With a growing economy and plenty of cash, China’s rulers are morphing into the international equivalent of predatory mortgage lenders; providing funds to high-risk borrowers knowing they will never be able to repay. Americans who lost their homes in the aftermath of the 2008 recession are all too familiar with what happens next; on returning to the friendly lender seeking an extension or adjustment on the loan the borrower discovers a far less friendly lender who demands payment and ends up with the house or other collateral pledged at the time of the loan.

That, according to recent news reports, is precisely how Beijing recently acquired a 99-year lease on a strategic port and chunk of land in Sri Lanka.

Beijing’s rulers see India as its major potential regional adversary and realized that a port in Sri Lanka would put them in a far better strategic position should they have to take it on. At the same time, they knew that simply taking the land they would need for such a port was out of the question and realized that Sri Lanka would never voluntarily allow China to build a base on its soil. So they came up with a scheme that would put Sri Lanka’s leaders in a corner with an offer they wouldn’t be able to refuse.

Sri Lanka’s ruling family wanted to build a second port even though every study they commissioned concluded that the country didn’t need a new port and that if they somehow managed to build one it would never pay for itself.

India and others refused to lend the Sri Lankans money they knew would never be repaid, but the predatory but smiling bankers from Beijing stepped up to the plate with an offer the Sri Lankan rulers simply couldn’t refuse.

Unfortunately for Sri Lanka, the loan agreement its rulers signed — but perhaps didn’t read as closely as they should have — included fine print that put the country into a real jam when the loan couldn’t be repaid in a timely manner.

When it became apparent to everyone that the debt simply couldn’t be paid off, Sri Lanka discovered the trap that had been set and was about to be sprung. When Sri Lanka sought a restructuring, China refused, and essentially threatened to bankrupt the country unless Sri Lanka was willing in exchange for cancelling the debt to give the port and 15,000 acres of land for 99 years. It was an offer Sri Lanka couldn’t and didn’t refuse and gave Beijing’s predatory lenders what they wanted.

• David A. Keene is an editor at large for The Washington Times.

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