The 12th anniversary of the Belt and Road Initiative (also called One Belt, One Road) was last month. Amid ongoing accusations that it is a debt trap, the Lowy Institute think tank reported that 75 developing nations now face severe debt crises driven by massive repayments to China. Developing countries are expected to pay Beijing a record $35 billion this year, $22 billion of which will come from the world's poorest nations, forcing deep cuts to health, education, and essential services.

Launched in 2013, the BRI financed large-scale infrastructure projects across Asia, Africa, and Latin America through state-backed loans, making China the world's largest bilateral creditor. Over the program's first decade, roughly 80 percent of lending from the Chinese regime went to nations already in or near default. As these debts mature, repayment pressures are straining public finances and reinforcing the charge that Beijing deliberately created a global debt trap.

In its defense, the Chinese Communist Party (CCP) advances four flawed arguments to deny that the BRI is a debt trap: first, that many developing countries owe more to Western lenders; second, that U.S. interest rate hikes caused their debt problems; third, that currency depreciation and a slowing global economy are to blame; and fourth, that China rarely seizes assets from countries unable to repay. Each of these claims collapses under scrutiny.

The CCP's first defense—that many Belt and Road countries owe more to Western or international lenders than to China—is mathematically true in some cases but deeply misleading. While Chinese loans may represent less than half of a country's total debt, these nations already had extremely low credit ratings and were considered too risky for traditional lenders. Western institutions stopped lending to avoid pushing them into default. China, however, stepped in and issued the very loans that tipped them over the edge. In many cases, Beijing became the lender of last resort because responsible lenders had walked away.

The second argument—that rising U.S. interest rates caused the debt crisis—is equally flawed. Fluctuating rates are a well-known risk built into every sovereign credit assessment. Countries that continue to borrow heavily despite poor ratings do so knowing refinancing will become more expensive when global rates rise. Responsible lenders account for that risk and withdraw when borrowers approach unsustainable levels of debt. China ignores those warnings, continuing to lend, ensuring that default becomes inevitable.