November 14, 2022
1 min read

Huge loans that countries owe to China may never get repaid

More importantly, more than half the world’s poor countries owe more to China than to all Western governments combined….reports Asian Lite News

Though China today finds itself holding significant sway over the financial futures of many developing nations, the vast sums of money that countries owe to Beijing may never get repaid.

Writing for the InsideOver publication, columnist Federico Giuliani, said that three-fifths of the world’s developing countries are now having considerable trouble repaying loans or have already fallen behind on their debts.

More importantly, more than half the world’s poor countries owe more to China than to all Western governments combined.

Giuliani said China became the lender of choice for many nations by generously donating money to governments for various infrastructure projects like hydroelectric dams, airports and highways.

For countries like Pakistan, Suriname and Kenya, public debt has increased many fold.

“Debt is one part of the challenge; the nature of Chinese loans is another. China issues far more of its loans at adjustable interest rates than Western governments or multilateral institutions. However, with global interest rates rising swiftly, debt payments are soaring when nations can least afford to pay,” writes Giuliani.

He further argues that China thus has made inroads into several countries, but the negative outcome of such ingress is there for all to see in myriad ways.

“Societies impacted by Chinese labour and materials realise that money comes, but with a catch. Jobs are promised but given only to Chinese people. Profits are there for grabs but only for Chinese companies,” he adds.

Further, Chinese security firms operate with much greater latitude in parts of Africa and have become states in themselves, making it far more difficult for countries to protect their sovereignty.

“As we go along, one can visualise problems for China as they will face a reducing return on debt and while they will continue to pull some strings, it may not be as easy as they may think,” writes Giuliani.

ALSO READ: Hasina inaugurates construction of China-funded expressway

Previous Story

Political unrest pushes Pakistan to the edge of economic precipice

Next Story

Xi aims to take control of Chinese minds

Latest from -Top News

Xi Woos Arab World

For Egypt, the summit carries special significance. Egypt’s accession as an SCO dialogue partner marks a strategic step toward forging more balanced, diversified international partnerships, particularly with emerging countries such as China,

More Killings in Gaza

Israel’s state-owned Kan TV News reported that Israel will stop the airdrop operation of humanitarian aid over Gaza City in the coming days, and the entry of ground aid via trucks to

Comic-Con Africa draws thousands of fans

The four-day convention, running from Thursday to Sunday, transformed the city’s Gallagher Convention Centre into a vibrant hub of creativity and fandom…reports Asian Lite News Tens of thousands of fans of comics,

Sudan’s Rapid Support Forces kill 24

El-Fasher has become the epicentre of the battle for control of Darfur, once the site of another bloody conflict two decades ago At least 24 civilians have been killed and more than
Go toTop

Don't Miss

Sri Lanka asks China to ease debt burden

President Rajapaksa met China’s Foreign Minister and State Councilor Yi

Army brass discuss threats from China, Pakistan

Army Commanders’ Conference is an apex level biannual event, which