In a practice referred to as "debt-trap diplomacy" or "debt colonialism," huge loans are given to countries that will be unable to repay, forcing smaller countries to give up major concessions when the loans default, according to The Center for Global Development.
Countries like Pakistan, Djibouti, Fiji, Montenegro, Maldives, Kyrgyzstan and Laos all owe China large amounts of money.
Last year, Sri Lanka owed more that $1 billion in debts to China, so it was forced to hand over a port to Chinese government-owned business on a 99-year lease.
Infrastructure loans to build roads and ports linked to the "Belt and Road" initiative to have led to countries owing millions or billions in debt, often accounting for large percentages of the countries' GDP.
China may be looking to leverage its debt in the Pacific in order to increase its military footprint in the South Pacific, The Times reports.
In April, China informed Vanuatu it had intentions of building a military base. According to the Sun, Vanuatu owes $246 million to China.