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Economics

Debt Defaults Are a Stress Test for China’s Soft Power Strategy

The biggest sovereign lender to the developing world is finding itself at the negotiating table as countries like Zambia struggle to pay what they owe.

A Bank of China billboard at Kenneth Kaunda International Airport in Lusaka, Zambia.

A Bank of China billboard at Kenneth Kaunda International Airport in Lusaka, Zambia.

Photographer: Waldo Swiegers/Bloomberg

After watching the four giant turbines churn water from the Kafue River, Zambia’s president, Hakainde Hichilema, delivered a message that might have come as a surprise on a tour of a dam project so integral to the future of his country’s economy.

Speaking in front of China’s ambassador to Zambia, Hichilema thanked Beijing for its assistance with the hydropower plant, which could turn the African nation into a regional electricity exporter. Then he very publicly questioned the $2 billion cost in front of the man whose country had bankrolled it with loans Zambia was trying to renegotiate.