For far too long, the Chinese Communist Party’s (CCP) global campaign for influence and quest for dominance has gone largely unchecked on the world stage. In an effort to better understand the full scale of the CCP’s growing influence around the world, House Foreign Affairs Committee Lead Republican Michael McCaul (TX-10) led an in-depth assessment to detail their activities and investments, particularly through their Belt and Road Initiative. The research found a number of disturbing trends negatively affecting the world in sectors that include trade, investments, security and arms sales, technology, and soft power initiatives to advance the CCP’s foreign policy interests. Key examples of the of their global investments and engagement can be explored in the following regional snapshots:
View as PDF, here.
An in-depth assessment led by House Foreign Affairs Committee Lead Republican Michael McCaul (TX-10), found that global investment and commercial efforts by the People’s Republic of China (PRC), mainly through its predatory Belt and Road Initiative (BRI), are negatively affecting many countries and their citizens around the world.
Launched by the General Secretary of the Chinese Communist Party (CCP) Xi Jinping in 2013, the BRI is falsely presented as a global development and investment initiative. In reality, it is an effort to expand the PRC’s heavy–handed influence around the world while also laying the groundwork for global military power projection.
Through this process, the PRC expands its control, cultivates dependencies via “debt trap” diplomacy, secures preferential access to natural resources, and gains dual-use commercial facilities that can be leveraged for military purposes. The PRC is also creating technological dependencies around the world by exporting intrusive technologies and the totalitarian governance techniques they enable. These various dependency traps foster malign political influence over countries and leaders in all corners of the globe. 147 countries have already signed BRI cooperation documents and the PRC has spent an estimated $2.3 trillion in global investments since 2005.
This assessment identified the following disturbing trends resulting from the PRC’s global engagement:
PRC loans and investments including those made under Xi Jinping’s Belt and Road Initiative (BRI) have created “debt traps” for countries in need of financial support and investment.
- Sri Lanka, which had already been forced to sign over physical control of dual-use infrastructure after defaulting on Belt and Road loans, entered a severe financial crisis in 2022, exacerbated by a foreign currency shortage caused by Sri Lanka’s unsustainable debt servicing.
- Laos, also a major recipient of BRI-related lending, is facing a major debt crisis with $12.2 billion in public debt to China alone, over 60% of its GDP
- From 2012 to 2020, Djibouti undertook $14 billion of investments and loans from China – the equivalent of 70% of their GDP. Additionally, as of August 2021, Zambia is in $6.6 billion worth of external debt to 18 PRC major and minor financers, leaving the Zambian government in perpetual economic turmoil. Lastly, Equatorial Guinea’s debt to China was an estimated 49.7% of GDP.
- According to the Boston University Chinese Loans to Africa Database, Chinese financiers signed 1,188 loan commitments worth $160 billion with African governments and their state-owned enterprises between 2000 and 2020, predominately in transportation, power generation, mining, telecommunications. The top loan recipient countries over the last 20 years included Angola, Zambia, Ethiopia, Kenya, Nigeria, and Cameroon, and most recently the largest recipients included Ghana, South Africa, and Cote D’Ivoire.
- Approximately 30%, equating to nearly $30 billion of Pakistan’s external debt is owed to the PRC.
- Recent research suggest scores of BRI countries together might have $386 billion in “hidden debts” or undisclosed liabilities that governments might be obliged to pay.
- Beijing is trying to internationalize the Renminbi (RMB) through intergovernmental institutions like the Shanghai Cooperation Organization to boost cross-border trade settlements and investment, lessen reliance on the dollar, minimize exchange risk and dollar liquidity shortages, and sustain access to global markets during geopolitical crises.
The PRC has consistently leveraged the BRI for its malign influence and political interference, including to quell criticism of the CCP’s human rights abuses and coercing governments to break diplomatic ties with Taiwan.
- Hungary blocked an EU statement in April 2021, criticizing China’s new security law in Hong Kong, hindering the bloc’s efforts to condemn the PRC for undermining freedoms of Hongkongers.
- Arab states with strong ties to the PRC have supported the PRC’s abuse of the Uyghurs. Since 2002, at least six Arab countries, including Egypt, the United Arab Emirates, Qatar, Saudi Arabia, and Morocco, have detained or extradited closed to 300 Uyghurs at China’s request. And, in October 2022, the United Arab Emirates and Qatar voted against a motion to highlight PRC human rights abuses in Xinjiang at the U.N.
- In 2018, a Taiwanese official claimed that the Dominican Republic broke ties with Taiwan in exchange for a $3.1 billion package for investments and loans.
- In 2019, the Solomon Islands severed longstanding diplomatic relations with Taiwan, a decision heavily influenced by the PRC’s elite capture of Solomon Islands politicians and offers of physical infrastructure under the Belt and Road. The Solomon Islands went on to sign an unprecedented security agreement with the PRC, which allows for an open-ended PLA military presence in the West Pacific.
- In February 2021, Guyana suddenly terminated an agreement with Taiwan following criticism from the PRC.
The PRC is strengthening its military partnerships with authoritarian regimes that undercut military and security interests of the United States and regional partners.
- Iran and the PRC are forging a comprehensive partnership spanning across economic and security lines. Experts anticipate this partnership will result in expanded trade ties, increased PRC investment, and heightened military cooperation. Iranian terrorist proxies use Chinese-made military drones to target core national security interests across the region, threatening the safety and security of U.S. service members.
- The PRC and Russia proposed the “Treaty on the Prevention of Placement of Weapons in Outer Space and the Threat or Use of Force Against Outer Space Objects,” which fails to address terrestrially based anti-satellite systems which both countries have deployed.
- Between 2009-2019 the Maduro regime in Venezuela received more than $615 million in arms exports from the PRC.
The PRC economic engagement has been used to gain control over dual-use infrastructure and strategically located land, covertly laying the groundwork for dramatically increased military expansion while improving the resilience of PRC energy routes.
- First reported by the Wall Street Journal in December, 2021, China is seeking to construct a military base in Malabo, Equatorial Guinea.
- The PRC took control of a strategic port in Sri Lanka along with thousands of acres of surrounding land under a 99-year lease after Sri Lanka defaulted on an economically unviable $1.1 billion deal with PRC contractors.
- In 2019, the PRC and Cambodia signed an agreement giving the PRC exclusive rights to part of a Cambodian naval installation on the Gulf of Thailand for 30 years, which supports PLA Navy operations in the South China Sea. The PRC is currently undertaking significant military construction at the facility.
- A PRC state-owned conglomerate has a 70 % stake in the Kyaukpyu port project in Burma and has the rights to operate it for 50 years. The port is the keystone of the “China-Myanmar Economic Corridor,” (CMEC) a plan to connect the PRC’s Yunnan Province directly to the Bay of Bengal coastline in Burma, granting the PLA military a land route for access and energy supply to and from the Indian Ocean, circumventing the strategic chokepoint of the Melaka Strait.
- In February 2019, a PRC-backed defense company in partnership with a UAE defense company opened a defense research center in Abu Dhabi, in which PRC and Emirati engineers and universities will jointly develop defense technology with the UAE armed forces.
- PRC influence over European ports has increased greatly in recent years, including increasing investments in ports in Spain, Belgium, Italy and the Netherlands and a controlling stake in Greece’s port of Piraeus, which has the potential to interfere with NATO’s ability to move troops and equipment across Europe. Also, as of October 2022, Berlin – with support from Chancellor Olaf Scholz – approved the China Ocean Shipping Company’s (COSCO’s) application to purchase a 24.9% stake in one of the Port of Hamburg’s terminals, despite national security concerns.
- The PRC has a foothold on strategic infrastructure surrounding the Panama Canal including the control of ports on the canal’s Pacific and Atlantic sides by a PRC-backed consortium.
PRC-led financing for telecommunications equipment and space-based systems is creating long-term dependency on intrusive and dangerous technology from a regime that is using data and personal information to violate the human rights of their own citizens. In many cases, this technology is shared with other authoritarian regimes.
- Tech companies that are integral parts of the PRC’s dystopian surveillance state are exporting intrusive surveillance and policing technology globally, frequently under the seemingly-benign label of “smart cities” — technology which was developed to facilitate the PRC’s totalitarianism and active genocide inside China, and represents a threat to civil liberties globally.
- Huawei constructed up to 70% of Africa’s information technology infrastructure, including telecom, national, and government networks that have been used for surveillance of opposition leaders in Uganda, Zambia, and Ethiopia, among others.
- Huawei installed over 500 miles of fiber optic cables between the city of Kashgar, China and Islamabad, Pakistan as part of a larger network tying Pakistani data flows to the PRC.
- The U.S.-China Economic and Security Review Commission raised concerns that a PRC-operated satellite and space mission control center in Argentina could be used for intelligence gathering and interference of space operations in the Western Hemisphere, part of an expanding network of the PLA military space facilities in Latin America.
- In Panama, Huawei has made the Colon Free Trade Zone a regional hub for the distribution of its electronic systems and installed its intrusive “Safe City Technology” that includes facial recognition cameras.
Lack of transparency and accountability in business practices by PRC-backed state-owned enterprises (SOEs) facilitate corruption in the public and private sector and undermine local efforts to strengthen the rule of law.
- Following an embezzlement scandal, the China Development Bank (CDB) halted financing for a light rail project, for which the Kazakhstan government repaid the CDB roughly $200 million owed to PRC contractors despite completion of only 15% of the project.
- Since 2008, various PRC-backed projects in Costa Rica have been halted or postponed due to conflicts of interest, ties to corrupt entities and other forms of malpractice.
- In April 2020, it was announced that the China Communications Construction Company will build the Train Maya railroad project in Mexico. This company was blacklisted by the World Bank in 2011 for fraudulent activities and is under investigation for irregularities with projects in Brazil.
- A PRC-backed loan for a highway project in North Macedonia was engulfed in a corruption scandal involving the country’s former prime minister.
Despite the PRC’s classification of free speech and freedom of information in the PRC as dangerous, PRC entities are providing training to foreign journalists under the guise of “media cooperation” while at the same time using local media to spread propaganda and undermine local efforts to strengthen independent media and press freedoms.
- The PRC’s Xinhua News Agency launched an Urdu-language paper in Pakistan to spread propaganda and counter negative news about PRC-backed projects.
- Between 2002-2017, the PRC arranged 82 trips for journalists from the East-Asia Pacific region to China. 41% of them came from democracies such as South Korea, Japan, Indonesia, and the Philippines.
- South African companies linked to China have a 20% stake in the country’s second-largest media group, which includes 20 prominent newspapers, which drew controversy by canceling a column that focused on the plight of Uyghur Muslims in Xinjiang.
Poorly conducted feasibility and environmental studies for construction projects have displaced local populations and exposed them to dangerous working conditions and low-quality infrastructure, including heavy polluting coal-fired power plants.
- In 2018, a PRC-constructed power plant in Kyrgyzstan broke down and left the capital city without heat mid-winter, resulting in a domestic political scandal and criminal investigation.
- The PRC simply disassembles, exports, and rebuilds older and dirtier coal plants that it deems too polluting for China in developing countries like Cambodia.
- Various PRC-backed mining and energy projects in Ecuador have caused serious environmental damage and displaced local populations, leading to social resistance.
- PRC-backed financing for coal-fired power plants in Serbia and Bosnia and Herzegovina (BiH) have contributed to worsening pollution in Europe and the Western Balkans.
- In Kenya, China Construction Third Engineering Bureau forged documents related to environmental issues to secure a contract worth $82 million to build a road that subsequently collapsed after heavy rain.
- The PRC constructed the Nairobi-Mombasa Standard Gauge Railway, which cost $4.7 billion, with plans to build industrial parks in multiple Kenyan cities and connect industrial areas with port access in Mombasa. Unfortunately, China abruptly declined to complete the railway into Uganda, and the opaque nature of the contract and the lack of external feasibility studies and environmental controls has been the subject of multiple legal challenges.
The PRC uses major land and resource concessions as a part of agreements with foreign governments to take over territory and eliminate competition for PRC-backed companies.
- An agreement for a $331.5 million loan to Tajikistan for a power plant entitles licenses for two of the country’s gold mines to China’s ExIm Bank until the loan is repaid in full.
- In 2018, El Salvador’s former government struck a deal with the PRC to develop a Special Economic Zone made up of 14% of the country’s territory that blocked non-PRC companies from investing. This deal has since been reversed.
- As part of an agreement for a $50 billion canal project, Nicaragua gave the PRC-backed developer a 50-year land concession.
For a PDF version of this document, click here.