Country, estimated to be owed up to $1.5trn, is increasing penalties for late payments and cutting back on infrastructure projects
China has become the world’s biggest debt collector, as the money it is owed from developing countries has surged to between $1.1tn (£889bn) and $1.5tn, according to a new report. An estimated 80% of China’s overseas lending portfolio in the global south is now supporting countries in financial distress.
Since 2017, China has been the world’s biggest bilateral lender; its main development banks issued nearly $500bn between 2008 and 2021. While some of this predates the belt and road initiative (BRI), Beijing’s flagship development programme has mobilised much of the investment in developing countries.
But a new report by researchers at the AidData research lab at William & Mary, a public university in Virginia, found that China, the world’s second largest economy, is now navigating the role of international debt collector as well as being a bilateral funder of major infrastructure projects.
This was always the endgame of Belt and Road. Loan money to countries who can’t afford the payments, then turn them into indentured servants and seize all the infrastructure that was built with Chinese loans.
There is Imperialism :C
And Imperialism :D
Lemmy knows which one it loves
Lemmy isn’t a hive mind
They beat out the IMF? Impressive.
Yeah they went to those counties that for some unimaginable reason don’t trust the IMF.
Meet the new boss, same as the old boss.
I mean I guess but the imf charges 2% interest on loans. China charges 5%
Alright: meet the new boss, slightly worse than the old boss, maybe.
China is way way worse than the IMF. The IMF restructures the debts of distressed countries to help them avoid bankruptcy. China sabotages this sort of help by refusing to negotiate on the same terms as other creditors, preventing the IMF from doing it’s job.
Charity and extortion. Has there ever been a more iconic duo?
On one hand, does the US ever give charity before the extortion? Not entirely unique to the CPC
The world can have two bullies.
Sure, but do you really want more countries doing it?
buwuduboutamerica 😭😭😭
Is this the belt part of belt and road?
Less of a silk road and more of a yoke.
They got the roads, now they get the belt.
This is the best summary I could come up with:
Lending from Chinese state-backed banks has helped to build railways in Kenya and power plants in Cambodia, along with thousands of other projects.
To mitigate the risk of future defaults, Chinese policymakers have introduced a number of measures, including reducing loans for infrastructure projects while ramping up emergency lending.
China has created “a safety net” for countries in financial distress – “and, by extension, their highly exposed Chinese creditors”.
The AidData report cites figures from the Gallup World Poll which shows that public approval ratings for China in low- and middle-income countries fell from 56% in 2019 to 40% in 2021.
But the AidData researchers found that between the early years of the BRI (2014-2017) and the latter period (2018-2021), Chinese lenders increased the maximum penalty interest rate for late repayments from 3% to 8.7%.
Bradley Parks, one of the report’s authors and the executive director of AidData, said: “Beijing is trying to find its footing as the world’s largest official debt collector at a time when many of its biggest borrowers are illiquid or insolvent.
The original article contains 605 words, the summary contains 176 words. Saved 71%. I’m a bot and I’m open source!
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1.5trn? Like 1.5 trillion Russian Nevnuts?
why don’t they just write the whole fucking God damn word it’s permanent record that like a million people are going to see on the internet you can spell out the whole goddamn word it’s a few more letters
Does the US have similar program? I like to compare. But I couldn’t find anything. Maybe US only provided aid and expect international brownies in return.
No, not really. But that’s more because the government and economy of China and the USA works fundamentally different. The US does a lot of foreign investment. But it’s done by the private sector. Chinese companies aren’t allowed to do foreign investments without approval of the Chinese government. So everytime a “private” Chinese company does an investment abroad, the Chinese government is directly involved.
The closest would probably be the landlease to Ukraine. All/most of the aid packages have to be paid back. Not necessarily with direct payments but by awarding (re-)building projects to US companies.
And obviously there is the IMF where the US pays the highest quota to and therfore has the highest voting power in how the money of the IMF is distributed.
USAID?
USAID is not a loan program.
offering loan guarantees to businesses,
Right, so a loan guarantee is not a loan.
The DCA, or the Development Credit Authority, on the other hand, was the initiative used by USAID to give loans, loan guarantees, and risk assurances to businesses—which essentially protected those businesses from any financial risks when they entered into new markets and privatized public infrastructure in developing countries.
Edit: Wikipedia
This is world news, comparing USA to China will not be tolerated in this lemmy group. Especially with this kind of anti Chinese article
