Chinese loans leaves many countries in "hidden debts"

[Coyster]

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:

Chinese loans leave developing countries with $385 billion in hidden debts, study says

The Chinese 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:

China currently spends at least twice as much on international development finance as the U.S. and other major economic powers, according to the AidData report — around $85 billion a year. However, this is often in the form of debt rather than aid,

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:

These debts are systematically underreported to the World Bank’s Debtor Reporting System (DRS) because, in many cases, central government institutions in LMICs [lower- and middle-income countries] are not the primary borrowers responsible for repayment, the report said.

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

[jackg]

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).

[arallmuus]

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

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

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

Some other 3rd world country in Asia as well

[suzanne5223]

The Chinese 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

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.

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

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.

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.

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.

[dothebeats]

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.

[Gozie51]

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.

[Coyster]

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.

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.

These debts often do not show up on countries’ government balance sheets, but many are guaranteed by their governments, blurring the lines between private and public debt and creating fiscal challenges for countries.

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.

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.

[CryptopreneurBrainboss]

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,

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.

[batang_bitcoin]

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

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.

[timerland]

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.

[Hydrogen]

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.

[jackg]

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

Some other 3rd world country in Asia as well

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

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 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.

[Darker45]

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.

[cabron]

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.

[Poker Player]

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...

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.

[Rruchi man]

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,

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 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.

[xSkylarx]

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...

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.

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.

[goldkingcoiner]

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.

[Ucy]

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. .

[YOSHIE]

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,

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, 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.