How China "drowned" 75 countries with billions of USD in debt - Analysis/ Loans under the "One Belt, One Road" policy!
With a "gun to the head" are the most economically vulnerable countries in the world, which are being asked to return unimaginable amounts of money to China from loans that were given to them mainly within the framework of the "One Belt, One Road" policy.
This is the conclusion of an analysis by the Australian Lowy Institute, according to which in 2025, the 75 poorest countries face a record debt of $22 billion to China.
"Now, and for the rest of this decade, China will be more of a debt collector than a banker in the developing world," the authors of the analysis say. "China's borrowing has fallen precisely when it is most needed, rather than generating large net financial outflows when countries are already under severe economic stress ," they point out.
Moreover, the pressure to repay this debt is making it even more difficult for these countries to finance health and education, as well as climate change mitigation. With $240 billion between 2008 and 2021, China sought to save the "One Belt, One Road" initiative, also known as the "Silk Road".
The "Belt and Road" Initiative, formerly known as "One Belt, One Road" (OBOR), is a global infrastructure development strategy adopted by the Chinese government in 2013, investing in countries and international organizations which is considered a fundamental part of Xi Jinping's foreign policy.
The initiative was included in the Constitution of the People's Republic of China in 2017. The Chinese government calls the initiative "an effort to strengthen regional cohesion for a brighter future." Some, mainly non-participating countries, have interpreted it as a plan to create an international trade network centered on China.
The Belt and Road Initiative (BRI) is the world's largest transnational infrastructure program, backed by the Chinese state, and has undertaken national projects ranging from schools, bridges and hospitals to major roads, shipping and airports.
This made China the largest provider of bilateral loans, with a total of more than $50 billion in 2016, more than all Western creditors combined.
The BRI focused primarily on developing countries, where governments had difficulty accessing other private or public investment. Chinese loans to countries facing debt problems grew from less than 5% of its overseas lending portfolio in 2010 to 60% in 2022, according to the study above.
Argentina received the most, $111.8 billion, followed by Pakistan with $48.5 billion and Egypt with $15.6 billion. Nine countries received less than $1 billion. Beijing also did not offer relief to all Belt and Road borrowers who were at risk.
Large recipients of Belt and Road financing, which pose significant balance sheet risk to Chinese banks, are more likely to receive emergency assistance. It was therefore assessed that in essence “Beijing is trying to save its own banks. That is why it has entered the risky business of international bailout lending.”
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