“It is no longer an issue for individual countries because there are small countries who borrowed from China and we have problems with that and the option is to collectively work together to find a way out,” said Tongan Prime Minister ‘Akilisi Pōhiva. Tonga owes about $115M to China, and according to a Reuters study, Pacific island nations collectively owe more than $1.3B to China. Pōhiva warned that asset seizures by China could be on the table if poor countries defaulted on their debts.

Indeed, China has used debt pressure to establish control over key assets in strategically located countries. Last December, Sri Lanka handed over a newly constructed maritime port to Chinese government-owned companies for 99 years, after falling behind in payments on over $1B of debt on the facility. Feasibility studies had demonstrated that the new port would not attract enough volume and revenue to pay for itself, but China pushed the deal through. Sri Lanka owed a total of $8B to China-controlled companies at the time of the transfer. According to the original terms of the loan and construction agreement, China would not be allowed to use the port of Hambantota for military purposes, but now that China has taken full control, all bets are off.

Djibouti, a small country on the horn of Africa, is now finding itself in a similar situation. Djibouti is projected to take on public debt worth 88% of its GDP, the majority owned by China. Last May, constructed was completed on the Doraleh Multipurpose Port, a $590M project co-funded by Chinese government-owned companies. Doraleh was operated by China until the government of Djibouti seized control of the container terminals, a move that was ruled illegal by a London court. A Chinese military base is located six miles away from the port. After financing the construction of a $4B electric railway through landlocked Ethiopia to the capital of Djibouti, China has decided to slow down its lending to Ethiopia on worries about the country’s debt profile and ability to repay.

Awareness of China’s problematic lending to poor countries has grown so acute that Quartz published a list of eight countries in danger of falling into China’s debt trap. Kyrgyzstan, a central Asian country that took on Chinese loans to build the Bishkek Thermal Power Plant, among other projects, saw its public debt soar from 37.3% of its GDP to 70.81% of GDP after its BRI debt. Pakistan’s 2016 public debt amounted to 10.91% of its GDP; after Belt and Road Initiative projects including the Gwadar Port were financed, the debt had mushroomed to 47.28% of GDP.