As China took up coronavirus fight it also began investigating top police official
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China Doesn’t Do Charity – OpEd
Over the last two decades, China has become the largest global lender, with outstanding claims exceeding 5% of global GDP. In total, the Chinese government and its companies have handed out 1.5 trillion USD in direct loans and trade credits to more than 150 countries. This has turned China into the largest creditor in the world, surpassing such organizations as the World Bank, the International Monetary Fund or all of the OECD creditor governments combined. It should be noted that many of these Chinese loans are secured, meaning that the loan is repaid from revenue gained, for instance, from exports. Numerous countries already owe China at least 20% of their nominal GDP (Djibouti, Tonga, the Maldives, Congo, Kyrgyzstan, Cambodia, Niger, Laos, Zambia, Samoa, Vanuatu and Mongolia).2 The “loan diplomacy” actively employed by China in recent years is aimed at gaining political influence in “vulnerable” countries in the Asia-Pacific region.3
Pakistan has seen large investments: for instance, 46 billion USD were used to transform Pakistan’s transportation and electric networks. The Karachi nuclear project K2/K3 is mainly funded by the Chinese state-owned Exim Bank which transferred over 6.6. billion USD in three payment stages.
The transport infrastructure in Ethiopia also received investments. This is most visible in the country’s capital Addis Ababa, where China sponsored a large part of transport projects, from new bypass roads to the first metro system in Sub-Saharan Africa.
From 2000 to 2017, Sri Lanka, a country in serious debt, received more than 12 billion USD from China in the form of loans or grants. Until 2017, the government of Sri Lanka was burdened by the loans of the previous administration. The Hambantota port project, which concluded in 2011, was funded by the Chinese government that hired a state-owned company to carry out the construction of the port employing mainly Chinese workers. After months of negotiations, the port was commissioned along with the surrounding land that was leased to China for 99 years. This illustrates the true intentions of China, which has now acquired a port in the direct vicinity of India for a couple of years.4
Belarus signed an agreement with the Shanghai branch of the China Development Bank in late 2019 on receiving a loan of 450 million euros. This loan is not intended for a particular project and can be used for different purposes, including repaying government debt, maintaining Belarus’ gold and currency reserves and furthering trade between Belarus and China.6
One of the largest projects, however, is the famous Belt and Road Initiative (BRI) which is a global development strategy adopted by China in 2013 that foresees infrastructure developments and investments in at least 70 countries and international organizations in Asia, Europe and Asia.
Presently, China has signed cooperation agreements concerning the BRI with 138 nations and 30 international organizations.
Categories: China Update