Top News
Manish Gupta Murder Case Update Gorakhpur Dm Ssp Pressurized Family Members Not To Register Case Against Police – Manish Gupta Murder Case
Top News
Gorakhpur Police Manish Gupta Case: Gorakhpur Police: Manish Gupta Murder Gorakhpur Police Trolled Over Silly Tweet On Knife Seizure
Top News
Gold Silver Price Today On September 30 Gold Mcx Holds Near 6 Month Low Silver Rates Edged Up – Gold Silver Price
- Celia Hatton
- bbc news
image source, COSTFOTO/BARCROFT MEDIA VIA GETTY IMAGES
China spends almost twice as much money for development works on a global scale as compared to the US and many other major countries of the world.
Evidence shows that most of these funds are borrowed from national banks at the risk of high interest rates.
The loan amount is staggering.
It is not a very old thing when China used to get foreign aid but now the matter is completely different.
According to the EdData Research Lab at William and Mary University of Virginia in the US, over a period of 18 years, China has invested about $843 billion in 13,427 projects in 165 countries, either as investments or as loans. Is.
A large part of this money is related to the ambitious Belt and Road project of Chinese President Xi Jinping. Under this project, China is building new global trade routes in which it has invested a large amount of money.
image source, TPG/GETTY
Yumo Railway will connect China and Laos
China’s ambition
An EdData researcher spent four years collecting information on all of China’s global debt, spending and investments. He says that the ministries of the Chinese government regularly keep information about how Chinese money is being used abroad.
Brad Parks, executive director of Eddata, explains, “We hear officials in China all the time saying ‘Look, this is the only option.’
The railroad between China and its neighboring country Laos is considered a prime example of China’s ‘off-the-book’ lending.
For decades, politicians thought of building such links as how to directly link Southwest China with Southeast Asia.
Although engineers have already warned that the cost would be too high, tracks would have to be built in steep hills, hundreds of bridges and tunnels would have to be built.
Laos is one of the poorest countries in the region and cannot afford even a part of the cost of the project. Despite this, the railway, built for $ 5.9 billion with the backing of a consortium of aspiring bankers and lenders from China, will start in December.
Laos, however, had to pay, but rarely, under his share. But to pay its share, Laos had to take a loan of $ 480 million from a Chinese bank. Laos has very limited profit-making resources (such as potas mines, etc.), but a large part of its profits went to pay off China’s debt.
“The loan given by the Chinese Bank as part of the stake actually reflects China’s strong desire to move forward through the project,” explains Wanjing Kelly Chen, assistant professor at the Hong Kong University of Science and Technology.
image source, EPA
loan diplomacy
Most of the railway lines are owned by the Chinese-dominated railway conglomerate, but the government of Laos is ultimately responsible for the debt under the dubious terms of the deal.
The result of this unbalanced deal is that international creditors are considering downgrading Laos’ credit rating to “junk”.
In September 2020, Laos was on the verge of bankruptcy. In such a situation, to deal with this situation, Laos sold a huge asset to China. Laos handed over a part of its power grid for $600 million to seek debt relief from Chinese creditors.
All this is an event before the start of railway operations.
Eddata says that China plays the role of a financier for many poor and middle-income countries.
Brad Parks says that on an average, China puts in about $85 billion a year under necessary finance commitments for its international development projects. Whereas the US is spending an average of about $37 billion a year for ongoing development activities globally.
Eddata says that China has left other countries of the world far behind in terms of providing financial assistance to development related activities.
Earlier, Western countries were guilty of dragging African countries into debt, but China is lending differently.
Instead of giving money or lending money for a project, he is giving almost all the money in the form of banking loan.
Such loans do not appear in the official accounts of government debt. This is because many deals of national banks do not have the names of central government institutions and such deals are kept off the government balance sheet. Along with this there are also many privacy rules.
Eddata estimates that this loan could be up to $385 billion.
Many times in the course of giving loan, he makes unusual demands from his assistant. Sometimes they have to promise to repay the loan with the money received by selling natural resources.
The deal with Venezuela is an example of this. The deal demanded that the borrower should deposit the foreign exchange earned by selling oil directly into a Chinese-controlled bank, so that if someone defaults on payment, the Chinese lenders can take money from the cash kept in that account.
Brad Park says “It really sounds like a bread-and-butter strategy to give their borrowers a clear indication of how big they are.
Wonders Anna Galpern is a law professor who joined an EdData study earlier this year examining China’s development loan contracts. He says, “Is China getting smart? Our conclusion is that it is fully protecting its interests.”
“It is not practical to expect that if they (borrowing countries) are unable to pay their debts, they will hand over their physical assets, such as a port or anything else, to China,” says Gelpern.
China may have to face some competition in the coming times.
At the G-7 meeting in June, the US and its allies announced that the G-7 had adopted a ‘spend’ plan to reduce China’s influence, which would fund global projects.
However, this plan took a long time to come.
“I doubt this Western effort will be able to impress China much,” says David Dollar, senior fellow at the Brookings Institution and former US Treasury Representative in China.
EdData researchers found that the Belt and Road project appears to be facing challenges on its own on some issues. Compared to other development deals in China, the project faced challenges due to corruption, labor scams and environmental issues.
Researchers say that Beijing has no choice but to address the concerns of borrowers for the BRI project to proceed properly.
read this also :-
Disclaimer: This post has been auto-published from an agency/news feed without any modifications to the text and has not been reviewed by an editor.
-
Entertainment4 days agoBrain stroke to Aamir Khan’s Lagaan actress, asking for money for medicine, painful
- Top News2 days ago
Latest Hindi News: After eastern Ladakh, now Chinese infiltration in Uttarakhand, PLA soldiers fled by breaking bridge – 100 Chinese pla soldiers crossed indian border in uttarakhand barahoti and damage bridge
- World5 days ago
Angela Merkel & Birds Now A Funny Meme
- Tech5 days ago
Hungarian railway company successfully relies on USU Software Asset Management
- Top News2 days ago
15 Lakh Applicant For Peon Job in Pakistan: In Pakistan 15 lakh apply for peon post including those with mphil degree
- Sports News5 days ago
Dodgers keep pace in NL West with 4-2 win over Diamondbacks
- Top News5 days ago
New record in covid vaccination, UP becomes first state to vaccinate 10 crore people
- Lifestyle5 days ago
Vice President Naidu pays tribute to Deen Dayal Upadhyay
