West indian countries

Huge loans countries owe China may never be repaid, analyst says – The New Indian Express

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By ANI

BEIJING: Although China today has a significant influence on the financial future of many developing countries, the huge sums of money the countries owe Beijing may never be repaid.

Writing for the publication InsideOver, columnist Federico Giuliani, said three-fifths of the world’s developing countries now have significant difficulty repaying their loans or have already fallen behind on their debts.

More importantly, more than half of the world’s poor countries owe more to China than to all Western governments combined.

Giuliani said China has become the lender of choice for many countries by generously giving money to governments for various infrastructure projects like hydroelectric dams, airports and highways.

For countries like Pakistan, Suriname and Kenya, public debt has increased several times.

“Debt is part of the challenge, the nature of Chinese lending is another. China issues far more of its loans at adjustable interest rates than Western governments or multilateral institutions can least afford to pay. writes Giuliani.

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He further argues that China has thus made inroads in several countries, but the negative result of such penetration is there for all to see in multiple ways.

“Companies affected by Chinese labor and materials realize that the money comes, but with a catch. Jobs are promised but given only to the Chinese. Profits are there to be gained, but only for Chinese companies,” he added.

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Furthermore, Chinese security companies operate with much greater latitude in parts of Africa and have become states unto themselves, making it much more difficult for countries to protect their sovereignty.

“As we move forward, one can visualize China’s problems as it will face a reduction in debt yield and even if it will continue to pull some strings, it may not be as easy as ‘she means it,’ writes Giuliani.

BEIJING: Although China today has a significant influence on the financial future of many developing countries, the huge sums of money the countries owe Beijing may never be repaid. Writing for the publication InsideOver, columnist Federico Giuliani, said three-fifths of the world’s developing countries now have significant difficulty repaying their loans or have already fallen behind on their debts. More importantly, more than half of the world’s poor countries owe more to China than to all Western governments combined. Giuliani said China has become the lender of choice for many countries by generously giving money to governments for various infrastructure projects like hydroelectric dams, airports and highways. For countries like Pakistan, Suriname and Kenya, public debt has increased several times. “Debt is part of the challenge, the nature of Chinese lending is another. China issues far more of its loans at adjustable interest rates than Western governments or multilateral institutions can least afford to pay. “, writes Giuliani. ALSO READ | Biden is working on Southeast Asia ties in the shadow of China He further argues that China has thus made inroads in several countries, but the negative result of ‘Such penetration is there for all to see in multiple ways.’ Companies impacted by Chinese labor and materials are realizing that the money is coming, but with a catch. Jobs are promised but given only to the Chinese. Profits are there to be gained, but only for Chinese companies,” he adds. ALSO READ | US Treasury Secretary Janet Yellen urges India to sever trade ties with China and Russia. Additionally, Chinese security companies operate with much greater latitude in parts of Africa and have become states unto themselves, making it much more difficult for countries to protect their sovereignty.” As we move forward, one can visualize China’s problems as it will face reduced yield on debt and even if it will continue to pull some strings, it may not be as easy as it thinks,” Giuliani writes.

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