Chinese loans leaves many countries in "hidden debts"

[jaysabi]

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.

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.

[SquallLeonhart]

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.

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.

[davis196]

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?

[Sanugarid]

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

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.

[Vishnu.Reang]

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.

[dimonstration]

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.

[fullhdpixel]

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?

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.