In 2023, after 163 years, the port in the Russian city of Vladivostok found itself back in Chinese hands, with Beijing clearly playing first fiddle in Russian-Chinese relations. In October of this year, the Russian opposition portal Vazhnye Istorii published a report on how the nature and population of Russia's Zabaykalsky Krai region are being threatened by the gradual intensification of coal mining by the company Razrezugol (Разрезуголь). However, the report only touches on the tip of the iceberg that is the gradual Chinese colonization of Siberia.
Razrezugol is half-owned by the Chinese company Shenhua Group, which mines in Australia and Indonesia in addition to China and Russia. While Russia imports mainly finished products from China, China, through its companies in Siberia, which are displacing Russian companies in many places, imports mainly unprocessed wood, coal, and aluminum from Russia.
Although Chinese companies have been doing business in Russia for a long time, their expansion in the Asian part of Russia has been accompanied for many years by an influx of Chinese migrants and inconsiderate practices towards the country in the field of mining. Chinese schools, shops, and various institutions are springing up in places where migrants live. The regional Russian press, as well as the local Russians, use the term yellow peril to describe this phenomenon. The process accelerated after the introduction of a visa-free regime on September 15 this year.
Debt trap
While the case of Russia is specific in many respects, China uses the debt trap to gain non-violent domination over most countries, although Beijing rejects this description of its practices as exaggerated. The Chinese Investment Bank has invested significant sums in several African countries. However, these countries are struggling to repay their debts and, on the basis of pre-signed and often secret agreements, are gradually losing their sovereignty to Beijing.
It is estimated that between 2000 and 2023, China provided loans exceeding $170 billion to selected African countries. These loans have made it possible to build road and rail networks, energy capacities, and ports in various parts of the continent. According to a Deutsche Welle article published at the end of last year, Beijing is trying to create its own global trade network by building roads, railways, and, above all, ports.
Although Chinese projects are often presented at the national level as support for the state economy, they often lead to excessive indebtedness in the recipient countries. In 2024, the World Bank warned that several African countries are at serious risk of economic collapse, mainly due to their high level of debt to Chinese financial institutions. Up to 40 percent of low-income countries—many of them in Africa—are already in a debt crisis or rapidly approaching one.
Chinese loans are contributing significantly to the worsening financial instability in these countries. The situation is further complicated by the opaque terms of Chinese loans and contractual provisions that make it impossible to restructure debt and set very strict repayment rules. These factors raise concerns that countries such as Zambia and Djibouti may fall into debt spirals and potentially lose some of their sovereignty to China.
As in other countries, African leaders often commit their countries to repaying unfavorable debts in exchange for bribes that line their own pockets. And as in Siberia, Chinese investors in Africa are not environmentally conscious. They threaten marine habitats with reckless port construction and deforest and pollute the soil to extract rare metals.
However, Beijing's cold-blooded pursuit of its own geopolitical interests is paying off. Thanks to its trade policy, China controls a third of the world's lithium deposits, nearly 70 key deposits of rare raw materials such as cobalt, manganese, and nickel, and effectively controls around 100 ports in 53 countries around the world.
Central Asia is not lagging behind
Between 2018 and 2021, Beijing financed the construction of six water facilities in Kyrgyzstan with $32 million, invested in agricultural development, and put hundreds of millions into the renovation of a power plant in Bishkek. However, the background to the reconstruction came to light in 2018: the Chinese supplier was buying fire extinguishers for $1,600 each and pliers for $320. The documents also listed other questionable items, such as $6 million for consulting services and $14 million for administrative costs.
However, China is pursuing long-term goals and is succeeding in doing so. Thanks to the short-sightedness of Kyrgyz politicians, the country now faces the threat of having to give up some of its largest infrastructure and energy facilities, as it is far from being able to repay its debt to neighboring China. China also influences public opinion in Kyrgyzstan, including directly through the purchase of media outlets.
In Uzbekistan, which Beijing also holds on a debt leash, it has not yet taken control of the media. As a result, anti-Chinese sentiment is spreading among Uzbeks under the pernicious influence of China on their homeland.
Europe is no exception
In 2021, Montenegro became the first European victim of China's debt trap. Long-time President Milo Djukanović lost the election for signing an unfavorable agreement with Beijing, but the country's debt remained. Serbia and Bosnia and Herzegovina found themselves in a similar, albeit not quite as bad, situation.
Beijing already has a 67 percent stake in the transshipment terminal at the Greek port of Piraeus through its companies, meaning it effectively controls the terminal. A similar situation prevails in the Spanish port of Valencia, where China owns 51 percent of the shares in the company operating the port. Beijing also owns more than 58 percent of the port in Zeebrugge, Belgium.
However, the expansive assertion of Chinese dominance is not limited to ports, of course. German robot manufacturer KUKA became Chinese in 2016, and in the same year, German engineering company KraussMaffei found itself under Chinese ownership. two years later, the former Slovenian appliance brand Gorenje passed into Chinese ownership, and the country's portfolio also includes European car manufacturers.
Nexperia, based in the Netherlands, which manufactures billions of chips for cars and various electronics, has also fallen into Chinese hands. It should be noted that this was originally a semiconductor division of Philips. In 2018, Nexperia was bought by Wingtech Technology, a partly state-owned Chinese company, for $3.6 billion. In October this year, the Dutch government took control of Nexperia due to concerns about technology leaks. The Dutch are currently negotiating in Beijing to end the dispute.
Beijing's influence on the American continent is a separate issue: it currently controls the Panama Canal and has a significant influence on the oil industry in Venezuela and metal mining in Ecuador, where, as elsewhere, Chinese investors show little regard for the local population or the environment.
It remains to be seen when China's commercial expansion will stop. Or what will happen when Beijing takes control of critical parts of the world's infrastructure and economy.