China has dramatically curtailed its lending in recent years. Now, it’s emerging as the largest debt collector for many of the world’s poorest nations — a shift that threatens to undermine poverty reduction efforts and fuel instability, according to a new report.
Lending for China’s Belt and Road Initiative — which includes funding for a massive series of new railways, ports and roads in the developing world — began winding down before the COVID-19 pandemic, according to Peak repayment: China’s global lending, released this month by Australia’s Lowy Institute, a foreign policy think tank. The report points to diplomatic pressure within China to restructure unsustainable debt and to recover outstanding debts from abroad for the change.
Every time China visits we get a hospital, every time Britain visits we get a lecture.
~ Dr Lubinda Haabazoka, Director of the University of Zambia Graduate School of Business and former President of the Economics Association of Zambia
Except they don’t get the hospital, they get loaned money to build a hospital, and China expects them to default. Then China takes the hospital.
It’s even more obvious when it’s a shipping port. You’ve built a port for China to control.
Here comes the lecture.
When it’s the Western Empire doing it through the IMF or Wall Street that’s good. When it’s China, it’s bad.
“During the cold war, the anticommunist ideological framework could transform any data about existing communist societies into hostile evidence. If the Soviets refused to negotiate a point, they were intransigent and belligerent; if they appeared willing to make concessions, this was but a skillful ploy to put us off our guard. By opposing arms limitations, they would have demonstrated their aggressive intent; but when in fact they supported most armament treaties, it was because they were mendacious and manipulative. If the churches in the USSR were empty, this demonstrated that religion was suppressed; but if the churches were full, this meant the people were rejecting the regime’s atheistic ideology. If the workers went on strike (as happened on infrequent occasions), this was evidence of their alienation from the collectivist system; if they didn’t go on strike, this was because they were intimidated and lacked freedom. A scarcity of consumer goods demonstrated the failure of the economic system; an improvement in consumer supplies meant only that the leaders were attempting to placate a restive population and so maintain a firmer hold over them. If communists in the United States played an important role struggling for the rights of workers, the poor, African-Americans, women, and others, this was only their guileful way of gathering support among disfranchised groups and gaining power for themselves. How one gained power by fighting for the rights of powerless groups was never explained. What we are dealing with is a nonfalsifiable orthodoxy, so assiduously marketed by the ruling interests that it affected people across the entire political spectrum.”
-Michael Parenti Blackshirts and the reds
A 2023 Associated Press analysis of the dozen countries most indebted to China — including Pakistan, Kenya, Zambia, Laos and Mongolia — found debt servicing payments were consuming vitally needed tax revenue for schools, electricity, food and fuel.
I guess this would be a litmus test for the CCP’s foreign policy for the future. Whether they choose to strengthen stability by canceling or restructuring debt, or foster PRC-branded instability. They’ve been materially playing the stability and reliability partner card recently with some. We’ll see if this factors into these debt decisions.
All debt collectors can get fucked
China also owns billions in US bonds. Japan owns trillions. They could crush us.
This is true, but fascinatingly more complicated. Here is an excellent short explainer video by TLDR News about China’s strategy with US treasury bonds.
Yeah definitely more complicated because there are dependencies on both sides. Thanks for sharing the video!
Well, they need certain decisions made is all. We need to develop ourselves and cut dependency on the superpowers, be it in military or economic terms.
