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

India to send holy relics to Mongolia by 2026

According to the Maha Bodhi Society of India, Arahant Sariputta and Arahant Moggallana were the two principal disciples of Lord Buddha. Revered for their wisdom and spiritual accomplishments, they hold a prominent

India, Uganda vow deeper ties

Minister of State Kirti Vardhan Singh met Ugandan President Yoweri Museveni on Thursday to discuss strengthening India–Uganda ties….reports Asian Lite News Union Minister of State for External Affairs Kirti Vardhan Singh met

India-Mongolia trade nearly doubles

Bilateral trade between India and Mongolia nearly doubles as the two nations mark 70 years of diplomatic ties and deepen their strategic and cultural partnership…reports Asian Lite News Bilateral trade between India

Modi, Ukhnaa seal a golden friendship

India and Mongolia mark 70 years of diplomatic relations with energy, cultural, and development pacts — a partnership rooted in shared Buddhist heritage and growing strategic trust….reports Asian Lite News India and
Go toTop

Don't Miss

Bangladesh Warned Of Becoming Pawn In China’s Grand Game Plan

Between 2016 and 2022 alone, China invested over USD 26

Harvard professor found guilty of hiding China ties

The 62-year-old was charged in 2020 as part of a