U.S. ‘deeply concerned’ that Chinese loans in India’s neighbourhood may be used for coercive leverage

Donald Lu told reporters ahead of the India trip of Secretary of State Antony Blinken

The U.S. is deeply concerned that the loans being given by China to India’s immediate neighbourhood – Pakistan and Sri Lanka – may be used for coercive leverage, a senior State Department official has said.

“Concerning Chinese loans to countries in India’s immediate neighbourhood, we are deeply concerned that loans may be used for coercive leverage,” Donald Lu, Assistant Secretary of State for South and Central Asia, told reporters ahead of the India trip of Secretary of State Antony Blinken.

The top American diplomat is travelling to New Delhi on a three-day official visit from March 1 to 3.

Mr. Lu said that the U.S. is talking to countries in the region comprising India to take their own decisions and not feel compelled by any outside partner.

“We are talking to India, talking to countries of the region about how we help countries to make their own decisions and not decisions that might be compelled by any outside partner, including China,” Lu said.

Earlier in the day, Pakistani Finance Minister Ishaq Dar announced that the Board of China Development Bank (CDB) has approved a $700 million credit facility to the country.

Responding to a question, Mr. Lu said that there has been a serious conversation between India and the U.S. on the issue of China.