The U.S. has often accused China of using “debt diplomacy” to make developing nations more dependent on Beijing.
Yet the case of Sri Lanka and Pakistan — both friends of China facing dire financial situations as inflation soars — shows that President Xi Jinping is becoming more reluctant to pull out the checkbook.
China still hasn’t made good on a pledge to re-issue loans totaling $4 billion that Pakistan repaid in late March, and it hasn’t responded to Sri Lanka’s pleas for $2.5 billion in credit support.
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While China has pledged to help both countries, the more cautious approach reflects both a rethink of Xi’s signature Belt-and-Road Initiative as well as a hesitancy to be seen interfering in messy domestic political situations.
Pakistan got a new prime minister on Monday after parliament booted out former cricket star Imran Khan, and Sri Lankan President Gotabaya Rajapaksa is facing pressure from protesters to step down.