this post was submitted on 07 Nov 2023
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Country, estimated to be owed up to $1.5trn, is increasing penalties for late payments and cutting back on infrastructure projects

China has become the world’s biggest debt collector, as the money it is owed from developing countries has surged to between $1.1tn (£889bn) and $1.5tn, according to a new report. An estimated 80% of China’s overseas lending portfolio in the global south is now supporting countries in financial distress.

Since 2017, China has been the world’s biggest bilateral lender; its main development banks issued nearly $500bn between 2008 and 2021. While some of this predates the belt and road initiative (BRI), Beijing’s flagship development programme has mobilised much of the investment in developing countries.

But a new report by researchers at the AidData research lab at William & Mary, a public university in Virginia, found that China, the world’s second largest economy, is now navigating the role of international debt collector as well as being a bilateral funder of major infrastructure projects.

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[–] Pons_Aelius@kbin.social 83 points 1 year ago (14 children)

Who honestly didn't see this outcome?

China splashes money at developing countries they have little or no ability to repay.

The money is spent contracting Chinese construction companies to build infrastructure projects of dubious relevance and value.

So, China loans the money, which returns to China via Chinese construction companies and the countries are left holding the bill.

I doubt the CCP ever actually expected to be paid back but will hold the outstanding loans over the country's heads as leverage.

I also expect that some of the countries involved never had any intention of paying back the loans and are playing the CCP for idiots. Once things get worse internationally they will nationalise the projects and tell China to go fuck themselves with the west's tacit support and backing.

[–] Cit@lemmy.world 7 points 1 year ago (1 children)

Most of the loans are secured by oil or other ressources besides money. So theoretically those lands can always "pay".

[–] match@pawb.social 4 points 1 year ago

Rare earth metals is another big one besides oil

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