In 2011, China gained 1,158 square kilometers of disputed territory in Tajikistan. With Dushanbe unable to repay outstanding loans to Beijing, a deal was struck between the governments: The territory was offered as a form of alternative payment in exchange for the writing off of the Eurasian country’s mounting debt. Some analysts viewed it as a textbook example of “debt trap diplomacy,” and the episode has only served to reignite the debate on the salience of this practice in China’s investment and engagement activities abroad.
The Debt Trap Debate
The term “debt trap diplomacy” was first coined by geostrategist Brahma Chellaney and is often used to scrutinize Chinese economic deals. Brad Glosserman, deputy director of the Tokyo-based Center for Rule-making Strategies, described the practice as the use of funds to “overwhelm recipient nations, drown them in debt and then seize collateral, often strategic assets…” In short, it refers to the predatory use of loans for immaterial and material gains. The ceded Tajik land can be interpreted as such a strategic asset, which the Tajik government relinquished in order to pay its debts to China.