Developing countries owe China at least $1.1 trillion – and the debts are due
Developing countries owe Chinese lenders at least $1.1 trillion, according to a new data analysis published Monday, which says more than half of the thousands of loans China has doled out over two decades are due as many borrowers struggle financially.
Overdue loan repayments to Chinese lenders are soaring, according to AidData, a university research lab at William & Mary in Virginia, which found that nearly 80% of China’s lending portfolio in the developing world is currently supporting countries in financial distress.
For years, Beijing marshalled its finances toward funding infrastructure across poorer countries – including under an effort that Chinese leader Xi Jinping branded as his flagship “Belt and Road Initiative,” which launched a decade ago this fall.
That funding flowed liberally into roads, airports, railways and power plants from Latin America to Southeast Asia and helped power economic growth among borrowing countries. Along the way, it drew many governments closer to Beijing and made China the world’s largest creditor, while also sparking accusations of irresponsible lending.
What happens if countries just default? Do non-Chinese lenders care? Does it trash bond ratings across the board?
I think in many cases China takes control of the infrastructure they built since the countries miss payments.
This was widely predicted to be the Chinese strategy: make loans to countries they knew could not pay with favorable terms for China when the country defaults.
That would involve these nations honoring their business dealings, which they don't seem willing to do.
Is China going to invade and occupy nations who don't comply?
I guess we'll see. Might not be a bad result for the nations, honestly. Supporting Chinese military bases might stimulate their economies.
Lmao the delusions. You can't not commerce with China if you are a developing country. Not honoring the contracts would mean an absolute destroy of any of the developing countries economies. Don't give opinions on shit you don't know about.
Calm down. Your argument looks weaker when you fill it with insults.
Gonna block you now. Learn to conduct yourself in a respectful manner.
If you aren't capable of understanding the context of different words thats on you buddy. Good luck creating your own little eco-chamber.
It's obviously been a debt trap from the start. Is anyone really naive enough to think China was building up Africa's infrastructure out of the kindness of their hearts?
It happened in Sri Lanka a while ago. China financed the construction of a new deep water port. The port is finished, but Sri Lanka can't service the debt so the new port is now under China's control (99 years lease agreement).
Oof. I wonder how that will work in the case of infrastructure like roads and bridges--long term tolls? At some point it has to eat away at whatever good will the Chinese were trying to buy.
If you let them build military bases and run dubious assorted operations they are actually quite reasonable with repayment plans.
Source: am Australian
China now has a Hong Kong in Sri Lanka? Weird