China is currently negotiating with the West African nation of Equatorial Guinea to build, maintain and use a naval base for Chinese warships operating in West Africa and the Atlantic. The Chinese offer includes large loans and large bribes for local officials. Similar deals are being made with Myanmar (Burma). China already has bases in northeastern Africa (Djibouti) and Pakistan.
The Equatorial Guinea deal is particularly attractive because the base would be an expanded version of an existing base for the tiny local navy. Piers would be extended to handle any Chinese warship. This base is adjacent to an oil refinery, so refueling is not a problem. The Burma situation is more complex because Chinese investments are keeping an unpopular military government in power. China has been selling that government weapons at discount prices, including a used submarine.
All of these bases are made possible by Chinese financing in the form of investments and large loans. What this means is that China is increasingly using its large foreign investments as weapons. A typical situation involves loaning poor countries large amounts of money for huge development projects, like ports, roads and railroads. The loans are on terms that look attractive but eventually must be repaid by governments that find themselves unable to do so. When the debtor nation runs into trouble making payments, China offers to reduce the load in return for control, if not majority ownership, of the ports, railroad, airport or whatever. With control of these facilities China can probably run them more efficiently, and profitably. But control means it is easier for China to use the facility for military or espionage purposes.
This use of loans is called DTD (Debt Trap Diplomacy) and has been a favorite Chinese tactic for ever since they became a major trading nation in the last few decades and one of the wealthiest nations in the world. Nations currently vulnerable, because of large Chinese debts, include those in need of expensive port upgrades, like Sri Lanka, Djibouti, the Maldives, Pakistan, Venezuela and Equatorial Guinea. Most nations are aware of the DTD trap but where there is a lot of corruption China can create a DTD situation anyway. Some of these DTD efforts go bad and cost China a lot of money, but on average DTD is a net gain for China as it acquires military, economic and diplomatic advantages without having to fight.
