III. Read the following passage carefully:
"There are two ways to conquer and enslave a country: One is by the sword; the other is by debt" —John Adams (former American President).
China, the 2nd largest economy in the world, has risen to the status of an economic superpower. Ever since China opened up its economy, it has grown exponentially to become the largest in terms of Purchasing power parity (PPP). This uninhibited growth has emboldened China to aspire for an alternative to the existing international economic order. China has expeditiously expanded its diplomatic, economic, political and security footprint among the developing countries.
In a party meeting, Chinese president Xi Jinping said that China would expand its ties with its neighbours on the principles of friendship and mutual benefit. South Asian countries like Afghanistan, Bangladesh, Bhutan, Nepal, Sri Lanka, Pakistan and Maldives have deepened their diplomatic and economic ties with China. China’s ambitious infrastructure and investment projects like the Belt and Road Initiative (BRI), President Xi’s pet project, are at the core of China’s economic ties with South Asia.
For India, China’s intervention in South Asia means geopolitical and strategic encirclement of India from all corners. China is practising what is commonly referred to by the western media as debt-trap diplomacy. All the investment projects taken up by China in South Asia have indebted most of the republics to the People’s Republic of China. China’s lending has exceeded 5% of the global GDP. It has mastered the art of extending loans, with strings attached, to financially vulnerable countries. The bigger the debt, the more leverage China gains over the borrowing country.
While borrowing high-interest loans, these countries sign contracts that include debt-for-equity swap. So, when they default on loans or interest payments, they are forced to give up sovereign strategic assets to China. The best example of this debt-for-equity swap is the leasing of Sri Lanka’s Hambantota Port to China for 99 years in exchange for debt raised in the construction of the port. Because of their financial dependency, some countries may end up becoming client states of China, solely dependent on the goodwill of China for economic and military security. Mired by Chinese debt, Pakistan has given the rights to China to run the Gwadar port for 40 years.
The infamous China-Pakistan Economic Corridor (CPEC), a signature project of the BRI, involves a whooping sum of $46 billion. The CPEC has increased Pakistan’s already high external debt to 70% of its GDP. Instead of bringing economic growth, the CPEC has destabilized the country’s financial security.
The Belt and Road initiative is crucial for China’s debt-trap diplomacy. This trap is not exclusive to South Asian countries. Several countries from Africa, Latin America and West Asia are also targets for Chinese loans and investments. By taking over several strategic assets in exchange for debt, China is increasing its sphere of influence in the Indian-Pacific region.
India is concerned about the increasing involvement of China in various port projects across the Indian Ocean as it is a threat to India’s maritime security and national interests in the region. India is actively trying to regain its dominance in the region and wane out the Chinese influence. It has joined the QUAD to thwart China in the Indo pacific. India is also renewing the South Asia Sub-regional Economic Cooperation (SASEC) to counter the BRI and improve regional connectivity in South Asia. India should also develop a regional funding mechanism to reduce the reliance on Chinese loans by South Asian countries.
Attempt the following questions based on the passage:

Question

III. Read the following passage carefully:

"There are two ways to conquer and enslave a country: One is by the sword; the other is by debt" —John Adams (former American President).

China, the 2nd largest economy in the world, has risen to the status of an economic superpower. Ever since China opened up its economy, it has grown exponentially to become the largest in terms of Purchasing power parity (PPP). This uninhibited growth has emboldened China to aspire for an alternative to the existing international economic order. China has expeditiously expanded its diplomatic, economic, political and security footprint among the developing countries.

In a party meeting, Chinese president Xi Jinping said that China would expand its ties with its neighbours on the principles of friendship and mutual benefit. South Asian countries like Afghanistan, Bangladesh, Bhutan, Nepal, Sri Lanka, Pakistan and Maldives have deepened their diplomatic and economic ties with China. China’s ambitious infrastructure and investment projects like the Belt and Road Initiative (BRI), President Xi’s pet project, are at the core of China’s economic ties with South Asia.

For India, China’s intervention in South Asia means geopolitical and strategic encirclement of India from all corners. China is practising what is commonly referred to by the western media as debt-trap diplomacy. All the investment projects taken up by China in South Asia have indebted most of the republics to the People’s Republic of China. China’s lending has exceeded 5% of the global GDP. It has mastered the art of extending loans, with strings attached, to financially vulnerable countries. The bigger the debt, the more leverage China gains over the borrowing country.

While borrowing high-interest loans, these countries sign contracts that include debt-for-equity swap. So, when they default on loans or interest payments, they are forced to give up sovereign strategic assets to China. The best example of this debt-for-equity swap is the leasing of Sri Lanka’s Hambantota Port to China for 99 years in exchange for debt raised in the construction of the port. Because of their financial dependency, some countries may end up becoming client states of China, solely dependent on the goodwill of China for economic and military security. Mired by Chinese debt, Pakistan has given the rights to China to run the Gwadar port for 40 years.

The infamous China-Pakistan Economic Corridor (CPEC), a signature project of the BRI, involves a whooping sum of $46 billion. The CPEC has increased Pakistan’s already high external debt to 70% of its GDP. Instead of bringing economic growth, the CPEC has destabilized the country’s financial security.

The Belt and Road initiative is crucial for China’s debt-trap diplomacy. This trap is not exclusive to South Asian countries. Several countries from Africa, Latin America and West Asia are also targets for Chinese loans and investments. By taking over several strategic assets in exchange for debt, China is increasing its sphere of influence in the Indian-Pacific region.

India is concerned about the increasing involvement of China in various port projects across the Indian Ocean as it is a threat to India’s maritime security and national interests in the region. India is actively trying to regain its dominance in the region and wane out the Chinese influence. It has joined the QUAD to thwart China in the Indo pacific. India is also renewing the South Asia Sub-regional Economic Cooperation (SASEC) to counter the BRI and improve regional connectivity in South Asia. India should also develop a regional funding mechanism to reduce the reliance on Chinese loans by South Asian countries.

Attempt the following questions based on the passage: