China’s infrastructure financing often brings heavy debt and long-term control. Through cases such as Tanzania and Sri Lanka, this essay examines the implications of 99-year leases and the risks of debt-driven dependency on Chinese investment.

Will Tanzania or Sri Lanka have such strength ninety-nine years from now?
2018-01-18
The following continues from the previous chapter.
Thailand once suspended its 15-billion-dollar (about 1.65 trillion yen) high-speed railway project in 2016, and last July decided to proceed with construction using Chinese technology while increasing the share of contracts awarded to Thai companies.
These infrastructure projects, planned and financed by China and overwhelmingly awarded to Chinese firms, may be slightly adjusted if the host country resists, but fundamental revisions are never permitted.
Poor countries are dazzled by abundant loans and cannot stop themselves even when they know the path leads to ruin.
Tanzania is a good example.
Including the construction of a port in Bagamoyo, it borrowed a massive 11 billion dollars (about 1.21 trillion yen) from China.
For the project’s implementation, the Tanzanian government must bear 280 million dollars (about 30.8 billion yen), 2.5 percent of the total cost.
Yet even that amount cannot be secured by the Tanzanian government.
Payment of interest and principal will likely be impossible.
In other words, it has effectively fallen into a debt trap.
What will happen to Tanzania from here?
It can easily be seen from the case of Sri Lanka.
The Sri Lankan government, unable to manage the strategic Hambantota port built with Chinese capital, transferred 80 percent of its shares to a Chinese company for 99 years.
This amounts to a de facto sale.
China itself was ruled by Britain in Hong Kong for 99 years and regained it when the term expired.
Will Tanzania or Sri Lanka have such strength ninety-nine years from now?
This article continues.