Ready to Read: Belt and Road Initiative
Known by many names, the One Belt One Road (OBOR) initiative is Xi Jinping's ambitious project which was started in 2013. The "Belt" encompasses Europe, China and Central Asia whereas the "Road" links all major port cities in the India Ocean and covers Africa and Asia. As ironic as it might sound, the "Road" refers to Maritime Silk Road.
Beijing around 2013 realized that it was overproducing goods and wanted to put them to good use. It was then that they came up with the Belt and Road Initiative aimed to build infrastructure projects, deepen relationships and its influence, and to counter US propaganda directed against China. China in return charges high-interest rates as most of the host countries are debt-ridden. For example, Pakistan in the year 2016 had around 15% of its GDP as its debt but after the CPEC (China - Pakistan Economic Corridor, a part of OBOR), its debt rose to 50% of its GDP. The countries which were not able to repay the debt usually paid so via real estate. For example, Hambantota port in Sri Lanka is leased to the Chinese for a whopping 99 years.
As appealing as it might seem, many believe that this project is a part of China's String of Pearls strategy also touted by other countries as a debt trap. India staunchly criticizes China's role in developing the regions of Gilgit - Baltistan which is a part of POK and argues that CPEC questions India's sovereignty. The dragon sees CPEC as an alternative route to transport oil via Gwadar Port and underdeveloped Xinjiang region of China as opposed to Strait of Malacca which could be blocked by either India or China in case of aggravated hostilities.
The bigger question is: Will China allow deferment of payment?
Cheers,