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The Chinese Government is popular in handing out loans, especially to poorer countries, but recent research has it that it has left majority of this developing and underdeveloped countries in massive "hidden debts", see the excerpt below:
The Chinese belt and road initiative (https://en.m.wikipedia.org/wiki/Belt_and_Road_Initiative) is a scheme designed by China to support developing countries by financing numerous projects in their country, but this scheme rather than actually aiding this countries, looks more like it makes them more and more indebted to China, see the excerpt below:
Another flashpoint of the belt and road initiative is that majority of this loans isn't directed to institutions owned by the Central government of the borrowing country, but to state-owned establishments, private organizations etc, but all with the consent of the central government that can jump in to bail out companies that prolly can't repay the loans, thus by extension, many of this debts go underreported, but this countries are actually in greater debt to China than most of the world actually knows, see the excerpt below:

Having said all these, is this a way that the Chinese government intends to keep many countries of the world indebted to them through this debt trap, knowing fully well that most of them would falter in repaying the loan leaving the Chinese government no other option but to seize some of their assets, I see this to be amongst China's plan towards being the country with the best economy in the world in some years to come, and just as is typical with the dictatorial Chinese government, they want to be the only ones at the advantage, leaving others at the receiving end.

Here is the source of the news for better understanding: https://www.cnbc.com/2021/09/30/study-chinese-loans-leave-developing-countries-with-385-billion-in-hidden-debts.html

I think this came out a few years ago as something China has been doing quite a lot to countries (especially in Africa).

It's been seen as a potential to be a strategy for invading/controlling countries, however it might just be a line between that and keeping countries in favour of them (to do things like not impose trade sanctions on China).

There is no point to seize those assets. The chinese government doesnt want to seize anything because that would leave a bad taste on their reputation but rather to have more favourable position in those specific countries especially in economic sector. Aside from that, this debt trap diplomacy will give the chinese better position than US as both countries are currently the world's largest economic power


Some other 3rd world country in Asia as well

This reminds what I read a couple of months ago about the amount Mongolia is owing to the Chinese but for what is what, the Chinese government never forces any of the developing countries to ask for assistance and I believe they understand very well what the deal is involved.
 
Why did still go for it? It means the government of the developing countries that require this loan also profit from the loan they got from the Chinese.

I don't know how relevant this information was. I do know that both the federal and state government has the right borrow money but when it has to do with another country I don't think the state can do it without the federal not knowing about it.


This is probably the Chinese government's strategy to enslave the developing countries but every government from those countries need to be wise and understand their intention.

Debt traps, and when the beneficiary country can no longer afford to pay China on their ‘aid,’ China will then turn to ask for their natural resources and that’s where their scheme pays off. I remember reading an article about a particular African country wherein the Chinese built some infrastructures and in turn harnessing the said country’s minerals and ore deposits. It also happened in Brazil AFAIK, wherein a portion of the Amazon was burnt to make way for China’s soy products to be farmed and planted there.

China’s deceptive ‘aid’ on developing countries could not be helped, though, as those countries receiving the aid can’t say much about what the communist nation wants to do in their country. It’s subtle bullying and control on China’s part, and it needs to be checked.

This is not just the fault of China but that of the corrupt government officials who would sell their conscience and mortgage the future of unborn members of the country in a huge loan deficit that sometimes the terms of reference to the loans are not clearly on papers or public eyes , they conceal them. They sometimes right the terms in Chinese language that will confuse the people.

The loans are in fact new ways for recolonization of the countries and subject them to themselves. Countries need to be careful while signing these loan agreements because not to end up giving out the countries inheritance in ignorance or selfish political interest.

That is exactly what the post says and if you read the link in the OP, you'd understand even better, these loans aren't collected without the federal government being aware, just that it isn't directed to central government institutions, thus most of it goes underreported in the eyes of most of the world.

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The Chinese belt and road initiative is designed to help/provide assistance for other countries, and the Chinese government knows fully well that most of this countries are actually in need of these loans, thus I find it extremely petty that the Chinese government have ulterior motives to put their borrowers into a debt trap and either tap from their resources or just basically out of lack of choice get their support in economic and political matters, it doesn't matter if they actually benefitted from the loan, but it's the concealed intention behind giving out the loan in the first place that's the bigger problem.

China is strategically planning to take over world power and having indebted countries is just one of their strategy. China know the loans can't be paid back and in exchange they take control over the countries (this could be through control of natural resources or other means) thereby enlarging their entourage in the process.

China has their targeted market and that's developing (struggling countries) and Africa counties are at the forefront. This is the only way they can take over world power. The more county they control they more power they have and since the countries will all be in debt to them, there isn't much that can be done as they'll simple obey whatever terms China comes up with to clear their debts.

I've watched a video explaining this and yes, they're in many places in Africa. In fact, that video that I can no longer found says that the majority of the African countries have Chinese debt. I forgot the only one or few countries that don't have debt on China. And they're doing the same thing in many Asian countries. This is actually a trap for most countries that cannot pay their debts, it's like the newest version of invasion but through debt trap.

I don't think that people should necessarily zero in on China. The US and other western countries are just as guilty of this.

There is such thing as "debt trap diplomacy".

Essentially, lend out so much money that people can't afford to repay, don't tell them anything, until it's time for them to default.

Then, use that as political leverage and accuse them as wrongdoing. It's a century old practice. Nothing to see here.

Lebron James and the NBA were forced to push certain politics. Due to certain demographics providing a significant portion of their funding.

The debt isn't free. Sometimes, it can come with strings attached.

Joe Rogan's podcast was recently bought by spotify for around $100 million. It is claimed that a good portion of spotify is owned by china. Which led many to fear Joe Rogan's content would be censored. Or pressure would be applied to persuade him to push certain agendas. I think those familiar with Joe Rogan can decide for themselves what is happening there if anything.

It isn't only podcasts or sports leagues who can be affected by funding, loans and debt. There are recent cases of entire countries being affected. The united states which provides funding to many nations across the world. Could do so with certain strings attached. Perhaps this is becoming a normalized part of politics and life. The secrecy of it however does appear to be a somewhat new thing. There have been many pushes for transparency and free access to information, which secrecy trends opposite of.

I knew some Asian countries had it too but I can't remember their names.

I know Bangladesh, Thailand, Singapore and the EU were trying to tighten then grips/diplomacy/economy a while back to either keep China away or fill a gap in a market they saw was available.

The EU and UK trading block appear to also be starting to get better relationships with some African countries (from memory, they've seemed quite close to Morocco, Egypt and Tunisia).


I remember they sold off their US bonds but only had $200bn. If they hold European debt or UK debt than it'll likely be paid back and not held on a threatening way - the EU has a vote every so often to eliminate the debts of the poorer countries, the UK just wants to feel wanted. The same goes for the countries I mentioned above - being unlikely to be indebted to China.

This has been an issue with China for quite some time. China is now rich enough to shower other countries with all kinds of projects by way of loans.

Airports, roads, ports, subways, skyways, and so on and so forth are built on foreign lands using Chinese money. The countries on which these huge infrastructures are built don't have to spend a penny for them to see what they may consider a step toward development. The payment will come afterwards, of course. And it comes with a heavy interest. The indebted countries, mostly poor ones, will have a hard time paying, of course. But it seems China is lenient. They would even continue to grant more and more loans. Of course, everybody knows these are debt traps.

But this is actually not a way to seize sovereign assets from other countries. This is more than that. This is actually a way for China to seize no less than the country's sovereignty itself. China is now holding a lot of countries by their necks. They can demand utmost loyalty to these countries. China has made strong leverage using debt traps. And it seems it has already gone to a point where other powerful countries cannot anymore control.

The interest that the Chinese ask is way lower than the interest that US asks for countries that loans. How is that a debt trap?
Sri Lanka for instance ask the Chinese government for a port development but the port seems to have been useless since they defaulted despite the low interest. It's not the Chinese fault. It's not true that because Sri Lanka has defaulted, China now owns the port. The Chinese however rented the port to develop it further for 75years according to some reports I've read.

It's sort of diplomacy but the Chinese are there to develop not to invade, ruin or make war.

Yes, China is very bad, but what about the borrowers?

This reminds me of the 2008 crisis when people, after having their homes foreclosed, blamed only the bank. And yes, the banks had a lot of blame, but the person who borrowed beyond their means on a credit binge had their share of blame too, let's not forget that.

I believe there's a term used to describe this - "Economic Colonialism", and it is a major concern for economic activist in most of the developing and under developed countries where there is corruption, that China happily hands out loans to knowing that paying back will be difficult.
 
Because of corruption as well, some of these loans are needless IMHO, and sometimes just a ploy between corrupt politicians of the borrowing countries and the Chinese government to get what they both want, that is more money to embezzle for corrupt politicians and economic influence/resources for the Chinese government from that country.

Yes, but countries are in desperate need of funds right now due to the pandemic. It's also like you said, they're borrowing money because they need it, but they don't realize they've already borrowed money that will be difficult to repay because it's so large. We should borrow money that we will be able to repay. However, this is no longer the case, as countries urgently require funds due to the pandemic.

Anything coming out of China willl be lies and deceit. I wouldn't trust a chinese with anything. They would rather "save face" than alert the world of a extremely contagious virus that kills 2-3% of the infected population. They even lie to their own people, even if it costs them their lives. They massacre falon gong practicioners based on a lie and they commit genocide on the Uigyurs also based on lies. Never trust China. China will be the end of the world.

That is for Countries that are dependent on the system, which doesn't include people within the countries that are not dependent on the system. This is why I continue to encourage people to avoid becoming too dependent on system/government. They need to be independent. Thankfully we have lots of independent people(probably most of them) where I'm from. They live self-sustaining lifestyle, and when they use infrastructures owned by the system they pay for them.

Our World belongs to us not the evil system. It will remain ours.  

*What I own is theirs, and i could take back what was given to any oppressor and give them to the ones that they may try to oppress. and the oppressors will beg for what was taken from them. .

Believe it or not, it's a fact, one of the countries that opposes and doesn't want to take loans from china is malaysia: Beware of China 'debt trap', Malaysia's Mahathir tells the Philippines (https://www.straitstimes.com/asia/se-asia/beware-of-china-debt-trap-malaysias-mahathir-tells-the-philippines), they are tired and tired of debt interest that swells every year, the reason for aid / funds for large projects, actually flowers and becomes debt.

China has been known for a long time in providing loans to countries that have weak economies, Asia's most easy target, apart from Malaysia, Indonesia is on the verge of collapse due to China's swelling debt, for 2021 Indonesia has a debt to China of $21.12 billion, this is 6 times larger in the previous year, not to mention loans from the United States, Japan and several other countries such as Singapore, among these countries China is the largest in lending, China is sneaky when it comes to lending.

This is a plot to conquer the Asian countries and China is not staying back from this as a way to show that they also have the capacity to entice and subdue the government of less developed in Asia. Loan and military support are few ways that countries see themselves as inferior to others because hunger has no end if support don't come and these governments are asked to go for loans but with attachment underneath that in the future won't favour the debtors. In the past, it was majorly by dominating the people physically to rule over them but at the time now that has been exchanged to loans, financial and incentive to work or school .

It's an important topic and the one that the authorities of developing countries should research more. My country is considering strengthening relationship with China and taking loans from it rather than from the International Monetary Fund. Getting a loan from China is much easier because there's no need to fight corruption or implement certain finance-related legislation. But apart from the fact you've mentioned, this sort of money also obviously comes with political strings of not mentioning the atrocities that China commits with human rights. So you end up indebted to a strong authoritarian regime, and that's never a good thing.

AFAIK, it was last year when they've sold US bonds those right? It's during the start of this pandemic. That's good way of handling debts by EU or UK.
Well unlike China, we know how they're granting all of these loans and they have some agenda that they see towards the country that they're allowing those loans.

That's the plan, to drown those country in debts because they have an agreement that they're going to take a portion of the land if they don't pay the debt and it's not really a hidden debt but more like a debt trap, a trap because the money loaned has a condition that it can only be given if about 50% of the workers or contractors in the project is a Chinese company so the money just recirculates plus they don't interfere with your internal affairs, sweet deal compared to USA.

The street has this story as their morning coffee topics for years now...

i just surprised that there is a lot of people still talking about this and feel surprised in 2021 ;D.
talking about macro economy isnt that easy, you'll just looks like a conspiracy theories die hard fan tho.
so far so good, china just doing their thing to conquer the world, is that what are you trying to say?
well, just look around you and see where is that stuff made? 90% must be made in china, that is the realistic power they have.
not that one you talked about .. the topic are quiet hard to consumed.

I think I've heard of this debt trap before,iirc it's probably from one of those 1 minute videos by Nas Daily, they did cover this topic although I didn't finish it because it's social media, you're supposed to be mindlessly scrolling through.

Obviously the borrowers cannot be excused of any blame, the thing is, majority of this 'debtor countries' are all run by corrupt governments, and I believe China are fully aware of this fact, this loans more often than not wouldn't be utilized completely for the good of the country, meaning some individuals would be personally pocketing chunks of this money, at the end of the day, the loans wouldn't have provided any visible development and it becomes somewhat impossible for them to pay back. It is at this stage the Chinese government thus exploits the country the way they decide due to their inability to pay back the loan.

Why is it "hidden"? That's the part I was wondering. Was it not given as a loan? Was it given as a gift and then asked back? I hate China as much as the next guy but it was always obvious that they were giving loans.

They are doing it even in my nation, they are building a road, they didn't ask for any money at all, and they just built the road, it is a very tiny job and nothing that important but it was foot in the door situation for them, god knows how big they may get in the future, but that road was done without paying them anything, and they just requested the income from that road, that's it.

They are basically doing stuff to improve nations and then get the income from those improvements, which is a business. Hate china all you want for their inhuman conditions and discrimination, and even concentration camps for Uyghur Muslims in their nation, and dictatorship and iron fist ruling and all that but when it comes to business, if China doesn't do it, some other nation does. Certainly better than USA's way of "bombing for democracy bringing" method to foreign nations.

From my own view, I don't see it extremely petty that the Chinese government gives out loans to a certain developing country without doing a proper investigation about the weekly or possible earning of the environs that want to be constructed before granting a single loan. To me, this is simply an idea of debt trap.

Yes it is because China knew how their government would work out if the government of the other countries is a corrupt leader then this is probably going to help them easily to invade/conquer most of the country by staying them in a debt trap. This was actually an old news but China have been doing this to other underdeveloped countries and most of these country's leader/government doesn't know what their(China) scheme aside from aiding. If the time comes when it's time to pay for what they owed to them, then it's too late when their government knew what was going on.

China has been playing the long game for decades, and this is just another chapter in it.  They're attempting to remake the world financial order by developing the satellite economies that will be tightly aligned and reliant on China, as a counterweight to the US-dominated financial system that the US has used to its geopolitical advantage for the last hundred years.

China is just doing what the colonial powers have been doing since the mid 20th century, when the former colonies got their independence. These newly independent countries need investment and China has been able to provide that at rates and terms which are much more attractive when compared to those offered by the western countries. Americans and Europeans are complaining, just because they can't get access to the natural resources from these countries at dirt cheap rates, like they did before.

This is one of many reasons why I don't like loan with interest rate. I prefer like to use crowdfunding like we usually do in ICO. I think crowdfunding is better then only lend money. Crowdfunding that companies did in ICO not only lift some weight from the company but also gives big profit if the project is succes. Just imagine if those countries do crowfunding using cryptocurrency and every that cryptocurrency holders will get benefit from the project that the governments make. Anyone can get easy money fron loans but the impact is very bad.

Technically true especially with the government being in control on almost any aspect of China and their affairs inside and outside the country, to be honest, I think that we should get used to it, they will lie and deceive because they know that they can bully people because they have the money, power and influence to be able to do this kind of stuff in the first place.

I'm trying to understand how this will profit the investors, the money raised will be used for projects in the country so what does the investors get? Same without tokens majority of the project that did crowdfunding are producing today. Majority of the countries taking this loans aren't using it for productive things which is why they're getting indebted. Imagine a country borrowing money to pay her workers and still this workers don't get paid fully due to corruption.

If this loans were taken and invested into structures that'll be bringing in revenue to the country economy and sure the loans could easily be paid off but no the corruption in this developing country is what is weighing them down. There's no gain in borrowing to eat instead you get indebted more and that's what's happening.

I don't think you read the link to the source in the op, these debts aren't called hidden cause the both parties are unaware, but because of the method and terms of handing out the loans which makes it difficult to report or to record, thus many of this sort of Chinese loans goes unreported to the rest of the world and also to agencies in charge of reporting and keeping track of such loans like the 'World banks debtor reporting system".

The government of the underdeveloped countries is fooled, they have seen the actions took by the Chinese and they have read about loan construction contracts provided by the Chinese government before.
if they still continue to acquire the same loan that put some previous developing or underdeveloped countries it means they are doing it to steal the country's money.
No government will do that if he/she not going to profit from it.

However, it is still categorized as hidden debt because some of the loans are not required through the directive of the central government institutions.

Most likely because the actors in China are state-controlled and imperialism isn't really a thing in the west anymore (compared to how it used to be) and the services are profit-driven by private enterprise.  China can afford to undercut them because it's not actually about profit for them, it's about exerting control on their new "satellites" and reordering the global balance of power.  Western actors are driven by profit motive and won't engage in contracts that aren't profitable, so China is able to completely undercut them and win the contracts.

In my own opinion, I would never blame the Chinese. I would rather blame the "borrowing nations". Just as you have rightly stated some of these funds end up in the pockets of private organizations and very highly corrupt government officials. Come to think of it, countries who always run to China to borrow are mostly blessed with both natural and human resources in the world yet because of poor leadership and corruption they refuse to invest in their nation. Most of these funds are never used to build industries or develop their economy. If it actually were, then they would be off debt in no time. It such a pity and a shame.

I just don’t get what’s their motive behind all these borrowing of money to developing countries. Seems to me like they are just trying to render these countries useless by continuing to put them in debts that they can never be able to crawl out from, which is very bad. And knowing very well that all these developing countries are filled with corrupt leaders who are only good at extorting money from the country’s wallet, there is no hope that they are going to be able to pay back all these money that they have borrowed from the Chinese government.

It's about aligning them economically and politically with China, the same way the US and USSR jockeyed for influence in Europe during the cold war.  Aligning other countries with either of the two competing super powers helped tip the global balance of power, and that's what China is attempting to do now.

You build a road, you build a toll, you build a bridge, you build a toll, you build a building, you get rent, you build a school, you charge government fee's per student, you build a hospital, you get money from government for each action, basically anything you could build that would help the nation could be profited. It could be privately owned and charged directly to the customer, or it could be built and given to government in exchange for returns based on performance as well.

This is how it is done in my nation, our government basically just pays for others to do stuff, it is profitable for investors to make our nation better, of course the sad part is the fact that government only accepts offers from their own friends so only they get rich from it but it is still a great way to make the nation better. Our finances suck but our roads are amazing, that's the end result.

China isn't that rich,so they couldn't throw money at the underdeveloped countries in the form of financial aid.
The Chinese want to profit from their financial activities and they want to expand their influence across the world.This is normal for a global super power.Are we going to play the "China bad,USA good" game?
It's strange how many people view the financial expansion of China as "bad" and "suspicious",while the financial dominance of the USA/Western world is supposed to be "good".
US,UK,CA,AU and EU corporations and banks were also giving loans and getting the natural resources of the underdeveloped countries.Why nobody is talking about them?

Well, aiding other countries with their financial problems by providing loans is part of the business and that's how they become a rich country. Moreover, that's another way of expanding and deepening their relationship with other countries by providing financial aids other than loans.

China is just following the example set by other western powers. Look at the middle eastern nations. Almost the entire economy is in the hands of American corporations. France dominates the economy of its former colonies in Africa. The same can be said about the UK in its former colonies in the Caribbean and Asia. China didn't had any colonies, so it was a late starter. But they had surplus cash at their hand, at a time when the western countries were sinking in public debt. And they used this surplus in a smart way.

The idea is to have them ally at the same time that country they lend their money is a sense of way to welcome them and allow everything they do in that country. Seems a opening for them to do and get what ever they wanted in tha country. There is a need for each countries to know that they should not fully rely on this country as everything on them have price. It's a new way of attacking or a war without blood. It's no longer hidden as the government aware on the possibility of China taking over some countries they wanted.

China is "that" rich in sort of way. Depends on the amount but they could throw in 100 billion dollars in aid if they ever wanted to and they could just use that money to build stuff instead of just simply give that money away. If you just simply send money then governments will end up taking that as bribe and only spend a small amount, that 100 billion would turn into 10-15 billion spent and rest goes in the pockets of the powerful politicians.

However, when you build something with your companies, you know that the money goes to the right place. I personally believe that they could do good in the world but it is also weird to expect them to do it without any returns, why would they not see that as debt they will collect later on. Don't take Chinese blood money if you do not want to be indebted to them, simple as that.