- China’s ‘debt trap’ in Sri Lanka
- Possible constitutional change in Japan
- Covid ankle monitors in Hong Kong
- Protest at Henan bank
- Slower growth on car market
- IMF urges debt relief
- Wang Yi warns about US influence
- Heads: Wolfgang Ehmann, Head of the AHK in Hong Kong
The situation in Sri Lanka is dramatic. The country is suffering the deepest economic crisis in its history. Unemployment and rising prices are driving people onto the streets, while a huge mountain of debt is crushing the national budget. On the weekend, insurgents even stormed the President’s palace.
But who is to blame for this state of affairs? Many point to China. In their opinion, it is a prime example of China’s alleged debt trap. Frank Sieren has taken a closer look at the complicated mix of loan agreements, fixed interest rates, and feasibility studies for the port project and comes to the conclusion that it was not China’s alleged debt trap that snapped shut in Sri Lanka. Instead, the reasons can also be found in Europe and the USA.
In our second analysis today, we look at Japan. There, the former party of assassinated Ex-Prime Minister Shinzō Abe won the election to the upper house of parliament on the weekend. Now, unexpectedly, the ruling Liberal Democratic Party and their coalition partners have an opportunity to implement a decades-old concern: Japan’s conservatives could finally amend the pacifist constitution. For China, that would probably be an unacceptable act. Finn Mayer-Kuckuk has analyzed the new post-election situation. He shows why Japan’s incumbent Prime Minister Kishida is unlikely to seek a constitutional amendment after all, despite his election victory.
Sri Lanka and China’s alleged debt trap
Sri Lanka is in the midst of the biggest economic crisis in its history. The island nation has more than $50 billion in foreign debt. Inflation is around 60 percent. Over the weekend, insurgents stormed the presidential palace. This Tuesday, President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe and his government team plan to resign unanimously.
Many people immediately think of China when it comes to Sri Lanka’s debt. More specifically, of the alleged Chinese debt trap into which Beijing is driving the countries of the Belt and Road Initiative – “Chinese neocolonialism,” as it is called in Washington. President Rajapaksa and Prime Minister Wickremesinghe did indeed maintain close relations with China for a long time. Now they have to face the accusation of having been cheated by China.
Hambantota is considered a prime example of Beijing’s debt trap, Sri Lanka’s second-largest but newest deep-sea port. The port is located on the most important shipping route between Europe and Asia and is also of military interest. So far, so true.