China’s Belt and Road Initiative is a global plan to finance and build highways, railways, ports, power plants, pipelines, and digital links across Asia, Europe, Africa, and parts of Latin America. It promises connectivity and shared prosperity, but it also revives an older logic of empire. As one analysis notes, today’s Belt deliberately retraces the old trade routes, only now the cargo includes fiber-optic cables and liquefied natural gas, along with political influence and security clauses that bind partners to Beijing’s terms.

The Scale of Money

The money is vast and strategic. China has announced record investment commitments, including what analysts called a buying spree of $124 billion aimed at energy-transition chokepoints such as lithium, rare earths, and hydrogen. Flagship corridors like the China-Pakistan Economic Corridor exceed $60 billion. The Asian Infrastructure Investment Bank, launched with $100 billion in authorized capital, adds another faucet for roads and rail, ports, energy and telecommunications infrastructure across Asia and beyond. When borrowers stumbled, China extended more than $185 billion in swap lines and other rescue facilities between 2016 and 2021.

Debt, Defaults, and Hidden Obligations

For many recipients, the biggest problem is debt. The list is long: Argentina, Ethiopia, Montenegro, Pakistan, Sri Lanka, Zambia, and others. Costly projects pushed debt-to-GDP ratios to dangerous levels and triggered balance-of-payments crises. Governments often signed sovereign guarantees or agreed to cover revenue shortfalls. These so-called contingent liabilities were frequently hidden from citizens and other creditors, which obscured the true levels of debt.

Studies have found that roughly half of China’s loans to the developing world are hidden. A 2022 study described the results as a series of hidden defaults. As one summary warns, It does not take much hidden bilateral debt to cause a credit crisis, and it takes even less to destroy trust when a restructuring begins.

When crises hit, many countries have turned to the IMF. The roster includes Sri Lanka, Argentina, Ethiopia, Pakistan, Ecuador, Kenya, Suriname, Argentina again, Zambia, Sri Lanka again, and Bangladesh. Kenya shows how leverage operates. After Kenya sought to delay interest payments on a Chinese-financed railway in early 2021, and after the IMF approved a $2.3 billion facility that April, Beijing began withholding payments to contractors on other Chinese-financed projects in Kenya. By year’s end Kenya stopped seeking new Chinese relief and made a $761 million debt-service payment on the railway.

Control is not only financial. Contracts sometimes allow strategic assets to be pledged if cash is short, including rights to a sea port. Security provisions travel with the money. In Pakistan, the rollout of CPEC 2.0 emphasized not just trade parks but also protecting Chinese workers and assets from militant attacks. In Afghanistan, Chinese envoys tied potential infrastructure and recognition to counter-terrorism cooperation on Beijing’s terms, aiming to police routes that touch China’s Xinjiang region. The method is consistent: bilateral deals, opaque terms, and security linkages that turn projects into levers.

Case Study: Montenegro’s “Highway to Europe”

Montenegro’s A-1 motorway captures the promise and the price. The first 25-mile stretch opened in 2022 after years of construction by Chinese firms. Drivers praise the safer, faster route, yet the costs were heavy: ecological damage to the UNESCO-listed Tara River, significant overruns, and debt fears that pushed the country toward refinancing. Investigators at the watchdog MANS say classified documents and a secretive bidding process created ample opportunities for corruption.

Local voices capture the trade-offs. Former ambassador Vesko Garčević said Chinese funds felt like “so-called easy money, as they understood it at the time,” and that “all this plays into China’s interest to expand its influence.” A 63-year-old doctor, Nina Ilic, was blunt at a rest stop: “This road is very, very, very expensive. And there’s corruption.” A Serbian beekeeper, Mihajlo Penič, welcomed the safety gains, recalling that on old routes “almost every day there were dead people,” but he added a lament: “Now, we have to pay someone else.”

Despite the controversy, the government has launched bidding for the next leg with European financing. Chinese companies are considered frontrunners.

Oil for Debt in Latin America

Falling oil prices turned parts of Latin America into cautionary tales. In Venezuela, China signed no less than 22 new deals to prop up a collapsing oil sector, an arrangement that looked like infrastructure-for-debt swaps. Ecuador struggled to meet output targets. In Angola, low oil revenues jeopardized repayment. Ratings agencies warned that the lack of commercial imperatives behind Silk Road projects means that it is highly uncertain whether future returns will be sufficient to fully cover repayments to Chinese creditors. Analysts concluded that after investing so heavily, Beijing has few options but to maintain support to keep production and repayments alive.

Central Asia, Corruption, and Rent Seeking

Early boosters predicted the New Silk Road would be credit positive for smaller, under-invested states, especially in Central Asia. Yet scholars flagged politicized institutions and abuse of public offices for private gains. In Tajikistan, a Chinese-funded highway became a toll road run by a murky offshore firm reportedly linked to the president’s family, which the family denied. The pattern, warned one researcher, could turn the new Silk Road into a Golden Road for kleptocratic governments and rent-seeking elites, risking inter-clan confrontations and rivalry.

Africa’s Power Buildout and the AIIB

Chinese finance has transformed Africa’s power map. In five years, China poured about $13 billion into sub-Saharan energy, backing more than 150 projects and over half of new renewable capacity. The OECD called China an important source of financing in Africa, noting that Western donors often avoid large hydropower and coal plants. The AIIB, meanwhile, backed a wide slate of cross-border connectivity projects and told members to expect many more investments in India and beyond.

The G-20’s Common Framework was supposed to fold China into cooperative workouts with IMF oversight. Progress has been slow, and Zambia’s case exposed new problems. A major BRI loan was reclassified as commercial, and interest could ratchet back up if IMF metrics improve, a setup that creates a terrible set of incentives. The IMF’s Lending Into Official Arrears tool offers another path, but when one creditor holds outsized leverage, staff will always err on the side of caution. The result is stalemate, opacity, and repeated pressure on the IMF to lend into uncertainty.

Critics see a pattern of disappointing returns, weak local spillovers, environmental damage, and construction quality issues, combined with the use of Chinese workers and subcontractors that crowd out local firms. They argue that hidden debts and bilateral renegotiations saddle successor governments and destabilize poor countries, then shift the burden to global institutions that must rescue them without full information.

Supporters say the BRI fills a real financing gap. Moody’s called the initiative credit positive for emerging sovereigns and expected Central Asia to gain from new infrastructure and trade flows. The OECD praised Chinese funding as a practical source of power-sector investment where Western lenders often stay away. Some projects deliver exactly what was promised. The expansion of Greece’s Piraeus port is cited as a win-win. On the ground, people appreciate safer travel and shorter drive times.

If development is the goal, transparency is not optional. Analysts urge clear IMF criteria that require borrowers to disclose all state-owned enterprise debts with sovereign guarantees, and a bright line between official and commercial Chinese lenders so that reclassifications cannot tilt the table mid-game. Borrowers would benefit from coordinating with one another to improve transparency, enhance information sharing, and enable borrowers to negotiate with Chinese creditors as a group.

ACZ Editor: China is building an empire, a web of trade and political influence designed to place China in the most powerful position possible. No other country in the network will have any chance to establish leadership – most importantly India, if they become fully embedded will become subservient to China.