Developing countries owe Chinese lenders at least $1.1 trillion, according to a new data analysis published Monday, which says more than half of the thousands of loans China has doled out over two decades are due as many borrowers struggle financially.
Overdue loan repayments to Chinese lenders are soaring, according to AidData, a university research lab at William & Mary in Virginia, which found that nearly 80% of China’s lending portfolio in the developing world is currently supporting countries in financial distress.
For years, Beijing marshalled its finances toward funding infrastructure across poorer countries – including under an effort that Chinese leader Xi Jinping branded as his flagship “Belt and Road Initiative,” which launched a decade ago this fall.
That funding flowed liberally into roads, airports, railways and power plants from Latin America to Southeast Asia and helped power economic growth among borrowing countries. Along the way, it drew many governments closer to Beijing and made China the world’s largest creditor, while also sparking accusations of irresponsible lending.
I think in many cases China takes control of the infrastructure they built since the countries miss payments.
This was widely predicted to be the Chinese strategy: make loans to countries they knew could not pay with favorable terms for China when the country defaults.
That would involve these nations honoring their business dealings, which they don’t seem willing to do.
Is China going to invade and occupy nations who don’t comply?
I guess we’ll see. Might not be a bad result for the nations, honestly. Supporting Chinese military bases might stimulate their economies.