Over the past few years, the U.S. has accused China of using "debt diplomacy” to make developing nations across the world more dependent on Beijing.
Yet the cases of Sri Lanka and Pakistan — both friends of China facing dire financial situations as inflation soars — show that Chinese President Xi Jinping’s government is becoming more reluctant to pull out the checkbook. China still hasn’t made good on a pledge to re-issue loans totaling $4 billion (¥501.26 billion) that Pakistan repaid in late March, and it hasn’t responded to Sri Lanka’s plea for $2.5 billion in credit support.
While China has pledged to help both countries, the more cautious approach reflects both a refining of Xi’s signature Belt and Road Initiative as well as a hesitancy to be seen interfering in messy domestic political situations. Pakistan got a new prime minister on Monday after parliament booted out former cricket star Imran Khan, and Sri Lanka’s leader is facing pressure from protesters to step down.