June 17, 2022
2 mins read

German Chancellor warns against China’s debt traps

Highly unsustainable levels of debt created by China in the developing world allow it to create economic dependencies and political leverages in these countries….reports Asian Lite News

Pointing at the serious danger posed by China’s lending spree in poorer countries, particularly Africa, German Chancellor Olaf Scholz warned that this could plunge the world into the next financial crisis.

“There is a really serious danger that the next major debt crisis in the global south will stem from loans that China has granted worldwide and doesn’t have a full overview of because there are so many players involved,” Scholz said.

“That would then plunge both China and the global south into a major economic and financial crisis and, incidentally, would not leave the rest of the world unaffected, to put it politely. So, this is a serious concern,” he added.

China’s infamous “debt-trap” policy is singularly responsible for the dire economic situation in many countries. Highly unsustainable levels of debt created by China in the developing world allow it to create economic dependencies and political leverages in these countries.

China has always maintained that its overseas lending follows a “no-strings-attached” approach and respects other countries’ right to select “their own development path” with a focus on developing countries’ control.

“One of the very, very big ambitions we have is to bring China in, as a country that is lending a lot in new ways,” he said, reported Hong Kong Post.

It is interesting to note that while criticizing China for its loan lending approach to the poor economies, Scholz pointed to the European Union’s recently unveiled Global Gateway initiative, which is in part aimed at countering China’s influence.

As per this initiative, the EU aims to invest over 150 billion euros in Africa. The investment is set for many key areas ranging from renewable energy to transport, vaccine production and education.

The ambitious scheme is widely seen as a response to China’s mammoth Belt and Road infrastructure project. Though there is worldwide condemnation of China’s debt-trap policy, Beijing disputes the charge. China argues saying that with the help of its loans the country is trying to alleviate poverty, as per the media portal. (ANI)

ALSO READ: Global outrage over China’s Xinjiang abuses

Previous Story

Pakistan pins hopes on US to revive IMF deal

Next Story

Afghan child labour on the rise in Iran

Latest from -Top News

Trump Lashes Out Over Fragile Truce

Trump mentioned that both countries “violated” the ceasefire that was announced late Monday….reports Asian Lite News US President Donald Trump on Tuesday issued a stern warning to both Israel and Iran, accusing

Global Brands Linked to Uyghur Labour Abuse

Labour rights experts warn that global brands are failing to account for the realities of their operations…reports Asian Lite News A recent investigation by The Bureau of Investigative Journalism has found that

Jaishankar Pays Tribute to Kanishka Victims

Jaishankar emphasised that the anniversary of the attack is a “stark reminder of why the world must show zero tolerance towards terrorism and violent extremism.”….reports Asian Lite News On the 40th anniversary

Taliban Severs Oil Deal with China Amid Growing Friction

Several countries have recently withdrawn from Chinese-funded infrastructure and resource deals, citing quality concerns, lack of transparency, and limited benefits for local populations….reports Asian Lite News The Taliban has cancelled a $540

India Targets Terror at SCO Meet

In addition to addressing the plenary, Singh will hold bilateral meetings with his counterparts from several participating nations, including China and Russia….reports Asian Lite News In a renewed diplomatic offensive against Pakistan-sponsored
Go toTop

Don't Miss

Xi’s chances of securing third term under doubts

The G7 last week called on Xi on everything from

Jaishankar Meets China’s Foreign Minister

The interaction of the two top diplomats followed the meeting