China has dramatically curtailed its lending in recent years. Now, it’s emerging as the largest debt collector for many of the world’s poorest nations — a shift that threatens to undermine poverty reduction efforts and fuel instability, according to a new report.
Lending for China’s Belt and Road Initiative — which includes funding for a massive series of new railways, ports and roads in the developing world — began winding down before the COVID-19 pandemic, according to Peak repayment: China’s global lending, released this month by Australia’s Lowy Institute, a foreign policy think tank. The report points to diplomatic pressure within China to restructure unsustainable debt and to recover outstanding debts from abroad for the change.
Well, they need certain decisions made is all. We need to develop ourselves and cut dependency on the superpowers, be it in military or economic terms.
Okay gang, I need you to think a bit more critically than ‘China Bad.’ First, why was the term “debt collector” used? China lent money, now they’re taking payments. Is that debt collecting, or just the second part of lending money? Is a mortgage lender a debt collector? That’s a loaded term meant to give you a negative impression, cuz no one likes a debt collector except perhaps an American hospital.
Second, the countries agreed to the loans. Paying them back was expected and predictable. If payments can’t be made, then the debt will be restructured, meaning the payment schedule will be modified so the debtor country can make payments.
Third, the money was often used to build a potentially money-making asset, like a port. If used correctly, the assest should pay for a decent chunk of the loan.
Forth, I see a lot of half baked comments like ‘China will take the port back’ or ‘China will take the hospital.’ You must first ask, with what will China take back an African port, or hospital, or whatever? They don’t have the means. They’re not going to park an aircraft carrier off the coast and drop bombs until the loan is repayed, because they can’t. So what does China want? China doesn’t want the fucking port, they want resources and friends with benefits.
China’s basically going here’s a loan, build a port to import goods for your people. Import from whoever you like, it’s your port. Oh by the way we make the cheapest and best everything (cuz they do), we’d be happy to sell you whatever you want, like solar panels or EVs. We also need colbalt and the finest silicon sand to build you these awesome EVs and solar panels you want, so we’ll buy that from your mines and use your cool new port to ship it. Here’s the loan payment schedule. No payments for the first 5 years, then afterward you pay X per year for 20-30 years. Oh no, you’re having trouble making payments? Well we benefit from you having that port too, so let’s restructure that debt so your people don’t revolt and get cozy with the US.
There’s no fucking debt trap. That’s just racist and moronic. ‘Those sneaky Chinese tricked the backwards brown people with a loan they can’t repay.’ Plus you can’t repossess a structure on the other side of the world without a credible threat of violence. China does not have the means. Economic coercion, sure, but the debtor agreed to that and they’re not stupid.
Fine, so China is just being as shitty capitalist as any other predatory capitalist country, is that the message you want to put across?
Are those other capitalist countries building infrastructure or just extracting wealth? It often seems like only the latter while China is at least building infrastructure first. I’m not sure how predatory it is, but it seems less predatory than what’s happened in the past.
Depends on the case. Hospital, probably good, building train tracks, dams, canals, ports that the colonial empires also did to facilitate extraction of resources. Depends on how it is implemented and how much the locals are listened to and integrated in the process. It is certainly possible for both to benefit.
Absolutly. This would be a fun topic to dive into, but I don’t know where to get raw, unbiased info about the deals (nor do I have time).
This is false. In case of Sri Lanka, they did take the port back and arguably the whole thing was setup since the economic viability of the port is suspect.
https://www.nytimes.com/2018/06/25/world/asia/china-sri-lanka-port.html
You’re either ignorant or a demagogue.
the economic viability of the port is suspect.
If the economic viability of the port is suspect what does China gain by taking it back? An asset that is losing them money instead of losing Sri Lanka money? Or are they managing it better so it produces a profit for them but not under Sri Lankan management? Are they selling off the assets to try to recoup as much of their investment as possible but still end up worse off than if they never paid for it in the first place?
What is the allegation here?
nytimes isnt necessarily a trusted source for unbiased information about china, or americas dealings. that aside, i wish i could read that article without them demanding or selling my information. so can you post a breakdown for us paranoids?
This article references the story of the OG port from 2018:
That article seems to focus on environmental sustainability, which, while important, doesn’t really mention the economic viability aspect that was part of the allegations earlier in this thread.
I can’t get past NYT’s paywall, and it’s the NYT, they’re not going to give an unbiased assessment, but I found the wikipedia article. I’m failing to see how China “took the port back.” Looks like a Chinese company bought an 85% stake into Hambantota International Port Group, an entity created by the Sri Lanken government to run the port. The agreement allows the Chinese company to operate the port for 99 years.
Then there’s this bit:
Writing in 2023, academic and former UK diplomat Kerry Brown states that China’s relationship to the Hambantota port has become the opposite of the theorized debt-trap modus operandi. Brown observes that China has had to commit more money to the project, expose itself to further risk, and has had to become entangled in complex local politics. As of at least 2024, the port is not a significant commercial success, although shipping through the port is increasing.
Yea, it’s almost like they should be compared with the developed world instead of the developing world.
When it’s the Western Empire doing it through the IMF or Wall Street that’s good. When it’s China, it’s bad.
“During the cold war, the anticommunist ideological framework could transform any data about existing communist societies into hostile evidence. If the Soviets refused to negotiate a point, they were intransigent and belligerent; if they appeared willing to make concessions, this was but a skillful ploy to put us off our guard. By opposing arms limitations, they would have demonstrated their aggressive intent; but when in fact they supported most armament treaties, it was because they were mendacious and manipulative. If the churches in the USSR were empty, this demonstrated that religion was suppressed; but if the churches were full, this meant the people were rejecting the regime’s atheistic ideology. If the workers went on strike (as happened on infrequent occasions), this was evidence of their alienation from the collectivist system; if they didn’t go on strike, this was because they were intimidated and lacked freedom. A scarcity of consumer goods demonstrated the failure of the economic system; an improvement in consumer supplies meant only that the leaders were attempting to placate a restive population and so maintain a firmer hold over them. If communists in the United States played an important role struggling for the rights of workers, the poor, African-Americans, women, and others, this was only their guileful way of gathering support among disfranchised groups and gaining power for themselves. How one gained power by fighting for the rights of powerless groups was never explained. What we are dealing with is a nonfalsifiable orthodoxy, so assiduously marketed by the ruling interests that it affected people across the entire political spectrum.”
-Michael Parenti Blackshirts and the reds
Fascists have argued that the enemy is both strong and weak, for a long time. The enemy changes over time perhaps, but it doesn’t seem that the far right does.
Every time China visits we get a hospital, every time Britain visits we get a lecture.
~ Dr Lubinda Haabazoka, Director of the University of Zambia Graduate School of Business and former President of the Economics Association of Zambia
Except they don’t get the hospital, they get loaned money to build a hospital, and China expects them to default. Then China takes the hospital.
It’s even more obvious when it’s a shipping port. You’ve built a port for China to control.
Here comes the lecture.
No, here comes the truth. Some of you need to hear it.
The truth is that Americans will call Israelis bombing a hospital in Gaza an act of self defense while China building a hospital in Madagascar is an act of war.
Right but Western aid has only ever done good right? I mean, that’s why South America and Central Africa are booming with industry and lack any serious endemic diseases right? Because the West made sure they would have the same living standards and be seen as truly equal competitors , right?..right?
They don’t care about anything unless it crushes the west.
Lol the West is doing that all on its own. But keep crying or whatever l.
A 2023 Associated Press analysis of the dozen countries most indebted to China — including Pakistan, Kenya, Zambia, Laos and Mongolia — found debt servicing payments were consuming vitally needed tax revenue for schools, electricity, food and fuel.
I guess this would be a litmus test for the CCP’s foreign policy for the future. Whether they choose to strengthen stability by canceling or restructuring debt, or foster PRC-branded instability. They’ve been materially playing the stability and reliability partner card recently with some. We’ll see if this factors into these debt decisions.
The real goal of Belt and Road: debt enslavement.
That’s the International Monetary Fund and World Bank
All debt collectors can get fucked
Don’t take on the debt if you can’t pay it back. Money has never been free.
Money is fake and you’re a chump if you let it rule you.
China also owns billions in US bonds. Japan owns trillions. They could crush us.
