Boris Johnson has ordered diplomats to launch a new drive against Chinese ‘expansionism’ after Beijing was accused of placing pressure on Barbados to remove the Queen as its head of state.
The island is one of the dozens of countries which form part of China’s ‘Belt & Road Initiative’, under which Beijing lends money to poorer countries to help them to fund critical infrastructure projects such as ports and high-speed rail lines.
With China able to seize control of the finished project if the countries default & frequently demanding preferential terms in trade deals as a condition of the loans, it has led to what one No 10 source described as a ‘Chinese chokehold’ over much of the developing world.
Mr Johnson, who fears that the economic damage caused by Covid-19 will make countries even more vulnerable to domination, is to demand that China is more ‘transparent’ about its financial dealings with other countries.
Barbados, which gained independence in 1966, announced last week that it would become a republic in 2021: Governor-General Dame Sandra Mason said that ‘the time has come to fully leave our colonial past behind…Barbadians want a Barbadian Head of State’.
US intelligence, which has been shared with the UK, has indicated that pressure was brought to bear on Barbados by its Chinese paymasters to cut their colonial ties.
Tom Tugendhat, Tory Chairman of the Foreign Affairs Committee, says that the incident showed how the Chinese are ‘tying new nations into their own imperial order’ by deploying ‘debt diplomacy’.
Writing in today’s Mail on Sunday, he says: ‘Barbados may be the latest trophy in Beijing’s imperial string of pearls…the Great Game has given way to the Great Gamble as countries are taking loans from Chinese state banks and betting they can pay them back before the default clauses come due.’
He adds: ‘We should remind our Caribbean cousins that a constitutional monarch, particularly under our peerless Queen, is the best defence against tyrants.’
Figures seen by the MoS have revealed for the first time the true scale of China’s reach over poorer countries, with money owed to China accounting for nearly one third of some countries’ GDP.
Pakistan is top of the list of recipients, with Islamabad owing China a total of £27 billion. The most leveraged country is Cambodia: the £5 billion it owes accounts for 29.5 percent of GDP.
Other major recipients include Laos, with 26.1 percent of GDP, Zambia with 23.4 percent, Ethiopia with 17.7 per cent, and Belarus with 13 per cent.
Mr Johnson’s new drive marks a sharp change of policy from previous Tory Governments: Theresa May’s Chancellor, Philip Hammond, pushed for Britain to fully endorse China’s global investment drive.
Mr Hammond complained recently about an ‘outbreak of anti-Chinese sentiment’ in the party after Tory MPs objected to technology firm Huawei being given a key role in building the UK’s 5G network.
And in 2017, the year after leaving Downing Street, David Cameron announced that he was helping to set up a $1 billion ‘UK-China Fund’ ‘to seek opportunities for co-operation between the two countries in technology’.
A No 10 source said: ‘As coronavirus devastates developing countries, many are finding themselves in a Chinese chokehold as a result of the huge debts they owe.
‘The Belt & Road Initiative is an expansionist Chinese Marshall Plan, for instance, Beijing is funding a high-speed rail line in Laos which is costing the equivalent of more than a quarter of the country’s GDP.
‘China is doing this in the least transparent way providing high-interest and unsustainable loans collateralised against countries’ natural resources. They are in danger of being forced to sell out future generations to meet their present debts.’
The source added: ‘As a member of both the UN Security Council and G20, China needs to step up to its obligations and end its chronic lack of transparency.’
Charlie Robertson, the author of The Fastest Billion: The Story Behind Africa’s Economic Revolution and an expert on Chinese ‘debt diplomacy’, said: ‘China is doing what Britain did in the Victorian era, exporting its savings to other countries as an exercise in global domination.
It has inevitably led to conspiracy theories about China hoping that the countries will default so they can seize critical infrastructure.’