Binish Thomas (Special Correspondent)
A devastating flash flood struck Nepal’s Rasuwa district near the Chinese border, leaving a trail of destruction across the Himalayas with more than 600 people dead, around 2,400 missing, and roads, bridges, homes and livelihoods swept away in minutes.
The disaster was believed to have been triggered by an avalanche of ice and rock in the fragile Himalayan region. But in Nepal, the tragedy raised another question: Did China possess upstream information that could have helped its smaller neighbour prepare?.
Nepali commentators criticized the absence of a reliable real-time warning system between the two countries.
Nepal has not officially blamed Beijing, and the event may have unfolded too rapidly for an effective warning.
Yet the episode exposed a wider concern – Nepal’s dependence on information and infrastructure controlled by its much more powerful neighbour.
That dependence reflects what may be described as China’s “dragon theory.”
It is not an official Chinese doctrine, but a term coined by the author several years ago to describe a pattern of Chinese economic engagement with struggling economies.
The imagery is simple: the dragon embraces a vulnerable country, feeds it with loans and infrastructure, gradually deepens its dependence and ultimately gains influence over its strategic decisions.
The theory attracted attention because it challenged the conventional portrayal of Chinese infrastructure financing as purely developmental.
Chinese officials and state-controlled media have repeatedly rejected similar allegations of “debt-trap diplomacy”, arguing that Beijing’s lending is intended to promote mutual development and that recipient countries bear responsibility for their own borrowing decisions.
The Belt and Road Promise:
Through the Belt and Road Initiative, China has financed ports, highways, airports, railways, power plants and telecommunications networks across Asia, Africa and other developing regions.
For governments struggling to obtain Western financing, Beijing offers large projects, rapid execution and fewer political conditions.
Chinese financing has produced genuine benefits. Roads connect remote regions, ports improve trade and power projects expand access to electricity.
But much of this support comes through loans rather than grants. Projects may be built by Chinese companies using Chinese equipment, while the borrowing country remains responsible for repayment.
AidData’s study of more than 13,000 Chinese-funded projects worth approximately $843 billion identified large amounts of “hidden debt” involving state-owned enterprises and other entities not always reflected in official sovereign-debt figures.
It also found growing implementation and repayment risks associated with several Belt and Road projects.
The danger becomes clear when a project fails to generate enough revenue to repay its debt.
Sri Lanka and the Hambantota Warning
No example is cited more often than Sri Lanka’s Hambantota Port.
Sri Lanka borrowed heavily from China to build the port, which struggled commercially during its early years.
In 2017, a Chinese state-owned company obtained a controlling interest and a 99-year lease to operate it.
To critics, Hambantota represents the dragon’s embrace:
China finances an ambitious project, the borrower enters financial difficulty, and Beijing gains long-term control over a strategically located asset.
Researchers at Chatham House have argued that China did not deliberately create Sri Lanka’s debt crisis to seize the port.
Sri Lankan leaders strongly promoted the project, while the country’s wider financial collapse also involved international bonds, domestic policy failures and borrowing from several creditors.
China was therefore not solely responsible for Sri Lanka’s crisis.
But the strategic consequence remains: a Chinese enterprise now holds long-term commercial control over a major port close to important Indian Ocean shipping routes.
A trap does not always need to be deliberately designed to produce influence.
Nepal’s Difficult Choice:
Nepal joined the Belt and Road Initiative in 2017, hoping to improve roads, rail links, energy systems and connectivity with China.
For a landlocked country historically dependent on India for trade routes, Chinese infrastructure offers an alternative.
But implementation has been slow and politically sensitive. Nepal and China have discussed roads, tunnels, transmission systems and a cross-border railway, but progress on several projects remains uncertain.
Nepal has frequently preferred grants or highly concessional assistance, while China has promoted loan-based financing for major projects.
A Himalayan railway may sound transformative, but construction and maintenance costs could be enormous.
If projected trade and passenger revenues fail to materialize, Nepal could be left repaying an expensive asset that cannot support itself.
The recent disaster also highlights environmental risks. Large infrastructure projects in fragile mountain regions require transparent risk assessments, cross-border cooperation and real-time data sharing.
Africa’s Debt Burden:
China has also become a major lender across Africa.
Chinese financing has helped construct railways, roads, dams, power stations and government buildings.
In many countries, these projects addressed infrastructure gaps that Western institutions had ignored or funded too slowly.But debt burdens have increased.
China is among the largest bilateral creditors to several African economies, although private bondholders and multilateral institutions also account for significant portions of their debt.
Zambia illustrates both the risks and the complexity. The country defaulted during the pandemic after accumulating obligations to Chinese lenders, international bondholders and other creditors.
China became essential to the restructuring process because billions of dollars were owed to its Export-Import Bank.
When one creditor becomes indispensable to a country’s financial survival, economic dependence can easily become political leverage.
Influence Without Formal Ownership:
China does not necessarily need to seize a port, railway or power station to gain influence.
A heavily indebted country may hesitate to criticize Beijing over Taiwan, the South China Sea, human rights or military activity.
It may support China in international forums, grant access to natural resources or favour Chinese companies in future contracts.
Dependence can be more useful than ownership.
Infrastructure also creates long-term relationships.
Chinese firms may operate ports, maintain telecommunications networks, supply replacement equipment and train local personnel for decades.
Borrowers Also Bear Responsibility:
Local governments often approve prestige projects without credible feasibility studies. Political leaders may use Chinese finance to announce airports, ports and highways that produce immediate publicity but uncertain economic returns.
Corruption, poor governance, inflated costs and unrealistic demand projections can turn a manageable loan into a national burden.
The “dragon theory” becomes possible not only because China lends aggressively, but because weak governments negotiate secretly and gamble with public money.
Development Without Dependence:
Countries do not have to reject Chinese investment. They should insist on transparent contracts, competitive bidding, independent environmental assessments and public disclosure of repayment terms.
Loans should be approved only after realistic:
Evaluations of whether a project can generate economic value. Strategic assets such as ports, power grids, telecom networks and water systems should never be pledged without parliamentary and public scrutiny.
Borrowers should also diversify their sources of finance rather than becoming dependent on China or any single country.
China presents the Belt and Road as cooperation among equals. But equality is difficult when one side controls the money, the contractor, the technology, the data and eventually the operation of the asset.
The dragon’s embrace may initially feel like rescue. The real test comes years later, when repayment begins and the weaker country discovers how much freedom it has surrendered.
Infrastructure can build a nation. But when financed without transparency, discipline or strategic caution, it can also become the route through which another nation enters and stays.
