‘Hidden debts’ reveal risks of China’s lending spree, by Gordon Watts

China’s exact debt position is unknown, due to the opacity of the Chinese financial system, but in the aggregate it’s huge. From Gordon Watt at asiatimes.com:

Dangers of BRI project and other foreign funding programs are highlighted in a comprehensive report

For many poor nations, it is a long and winding road to ‘debt’ and ‘corruption.’ A journey littered with economic potholes in the shape of China’s signature foreign policy project which was unveiled by President Xi Jinping six years ago.

In short, the US$1 trillion Belt and Road Initiative, along with other foreign funding, has become a magical mystery tour, baffling the World Bank and the International Monetary Fund. Or, according to critics, a diplomatic car crash waiting to happen.

“Compared with China’s dominance in world trade, its expanding role in global finance is poorly documented and understood,” a report released last week by the Kiel Institute for the World Economy stated.

“Over the past decades, China has exported record amounts of capital to the rest of the world. Many of these financial flows are not reported to the IMF, the BIS [the Bank for International Settlements] or the World Bank,” authors Sebastian Horn, of Munich’s Ludwig Maximilian University,  Carmen M Reinhart, of the Harvard Kennedy School in the United States, and Christoph Trebesch, of the Kiel Institute for the World Economy in Germany, wrote.

“‘Hidden debts’ to China are especially significant for about three dozen developing countries, and distort the risk assessment in both policy surveillance and the market pricing of sovereign debt,” the working paper added.

The study then went on to highlight that China is now the world’s largest creditor.

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3 responses to “‘Hidden debts’ reveal risks of China’s lending spree, by Gordon Watts

  1. Pingback: ‘Hidden debts’ reveal risks of China’s lending spree, by Gordon Watts – Additional survival tricks

  2. ” Again, much of this value goes back to China. They’re not doing this for humanitarian reasons. The Chinese expect a capital and cultural return.”

    D.Greenfield’s take on China’s increasing power over other countries:

    http://sultanknish.blogspot.com/2019/08/16-muslim-countries-endorse-china.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+FromNyToIsraelSultanRevealsTheStoriesBehindTheNews+%28from+NY+to+Israel+Sultan+Reveals+The+Stories+Behind+the+News%29

    Like

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