China’s Major Overseas Debt Problem
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- Опубліковано 25 лип 2022
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China's landmark Belt & Road Initiative has led to them becoming the biggest creditor to developing nations. But with the global economy faltering, many are defaulting on their debts. With no obvious solution, we look at what the future holds for China.
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1 - www.bbc.co.uk/news/59585507
2 - www.ft.com/content/ccbe2b80-0...
3 - www.economist.com/graphic-det...
4 - www.ft.com/content/ccbe2b80-0...
5 - asia.nikkei.com/Spotlight/Sri...
6 - en.wikipedia.org/wiki/Hambant...
7 - www.ft.com/content/ccbe2b80-0...
8 - www.ft.com/content/ccbe2b80-0...
9 - asia.nikkei.com/Spotlight/Sri...
10 - www.ft.com/content/ccbe2b80-0...
11 - www.chinaafricarealstory.com/2...
12 - www.economist.com/finance-and...
13 - www.ft.com/content/ccbe2b80-0...
14 - / 1547626601940402177
15 - www.ft.com/content/ccbe2b80-0...
16 - rhg.com/research/new-data-on-...
17 - www.cgdev.org/sites/default/f...
When you owe the bank a thousand pounds, you have a problem. When you owe the bank a million pounds, the bank has a problem.
Did he mention Ukraine as well?
Imagine your debtors getting killed who's gonna repay your loan..
With that analogy Ukraine invaded by Russia
right concept, wrong magnitude
million pounds - your problem
100 million pounds - bank's problem
When a bank has a problem it's not the bankers that have to skip meals
Not unless that bank is China and they are happy to take your ports, mines, islands, etc...
@@neogenzim1995 good luck getting a million from someone who works at Wendy's.
For people asking "but can't the Chinese just reclaim the asset?" I might be able to help. I'm a mortgage broker and people are under the impression that when a bank forecloses on a property that it recovers financially from it. It does not. There are no winners in a situation where a project is defaulted on. Here are the main reasons why:
1. The asset isn't worth what the lending amount was based on - for example, if you lend $10 billion for a railway in Djibouti, what is it worth if it is defaulted on? Probably much less than the amount the loan was originally based on
2. It costs tons of money for the bank. For example, the skyscraper in Sri Lanka. Not only is it worth much less than the original loan amount, but now suddenly the bank is responsible for everything on that building - from utilities, to upkeep, to rental management, etc. This is on top of the sheer distance involved making everything even more expensive (the bank isn't down the street from the asset - it's a different continent)
3. Hit to soft power- the tactics of using Chinese labour for the project, corruption and perceived bad intentions will certainly have a negative impact on the local population in regards to China- this makes everything from upkeep to security to future deals that much harder
4. There is always the possibility that the asset becomes worthless. Sri Lanka for example and its skyscraper. Skyscrapers requires A TON of upkeep, maintenance, etc to keep it in acceptable condition. Now, if China reclaims the asset, has to manage to do all of this (which is extremely hard to do in a healthy, domestic, local economy) in a country that is completely breaking down. That means electricians, utilities, basic services are breaking down entirely while China has to somehow keep a high scale skyscraper in the middle of it in good condition. People say boats are a money pit - try a skyscraper in the middle of a completely breaking down developing nation that doesn't like you
These are just some of the complexities that China will face with these assets. To top it all off, any one of these nations could say "our credit rating is junk, why dont we just tell China to bug off" and they could do that. I have done millions in loans for people ranging from extremely poor credit profiles to extremely good - there are very good reasons, that are very hard to expect, to not work with bad credit clients. There's a reason the free market does not want to lend to them and it's not because they hate the poor; if rich nations could make 5% interest on infrastructure in developing nations, without risk of serious issues, they'd be lining up to do it. The harsh truth is that the developing nations will, have and most likely will mess it up.
China is facing serious insolvency issues in its property market and this issue on top of it, alone is manageable enough, is just another straw on the camels back. How strong is the camels back? We will find out
Very useful comment thank you, this makes much more sense. I was skeptical of how serious the problem was for China and this highlights it.
@@victoriahaque5519 Sure! Believe me, I have learned these lessons the hard way... working for clients who have trouble getting credit sounds good morally but it is 100x harder than it seems for unique reasons.
The issues with these "assets" go well beyond what I am explaining here. There is a reason the free market does not engage in this type of lending. I would lend in a heartbeat if the returns outweighed the risks.
I actually have a pretty good explanation for the Belt and Road Initiative and why China engaged in it. It was not primarily for world domination. It was not primarily to have more influence abroad. It was not primarily to make profitable returns. The primary reasons were the following: 1. Ensure consistent employment for Chinese workers and 2. To offload the excess manufacturing product in industries such as steel and concrete. After about 2010 the Chinese infrastructure development domestically began to slow in its returns - meaning $1 dollar in debt for infrastructure would return less than $1 in GDP growth (Through the 90s and early 2000s $1 of debt for infrastructure might return $1.50 in GDP growth - thus making financial sense). So by the year 2012, Chinese factories were producing more concrete, steel, etc than could be invested/used domestically. That is when central authorities devised the plan to offload this excess manufacturing capacity into other countries. Sure there were other reasons as well, maybe some extra international influence, trade position, etc but the primary reason was to maintain employment and ensure Chinese factories continued their growth and production levels. That is why we saw the B&R Initiative start in 2013 - right about the time that domestic infrastructure investment began to become seriously poor financially speaking. Property developers did not stop the overproduction until the three red lines law was enacted in 2018 and the fall out from this sudden brake is still being played out; same with the B&R initiative as this video explains.
The West has an excellent habit of always assuming her enemies are stronger, more competent and more skilled than she is. We assumed Russia was a military behemoth that could take on the USA directly. We assumed China was this elder strategic planner who was well on their way to global domination of trade and soon militarily. In reality, these prove not to be true, but it is far better to be overly cautious. We found out with Hitler the mistake of underestimating an enemy. My opinion is that we continue operating with these assumptions until they are proven to be completely false and China/Russia no longer pose any threat to the West.
Thanks for your explanation
@@joenichols3901 thank you, fantastic commentary. It is clear to me that the Chinese squandered thirty years of relative wealth
Thus is a very logical response (in fact likely the most logical) I've seen on the BRI so far. Thank you for your observations.
The assistance in construction takes the form of Chinese only labour, meaning wages being paid by the loaned money flows straight back into the Chinese economy, not the local government that has shouldered the burden of the debt.
I didn't know this. Mmmmh 🤔
True, but the company is getting infrastructure - which still could help them built up the economy
Indeed 👍👍
Everything goes back. Labor, resources, machinery, comes from China.
Governments start various infrastructure projects when there is a need to vitalize economy, but use taxpayer money for this. In China's case, the stimulus packages are paid for by developing countries
Not just labour but controls, telecommunications, operating systems etc ensuring that future dependence on parts and expertise is baked in. Like handcuffs really !
I'm from Zambia, Zambian, in Zambia.
The problem, to the extent that there is a problem, is that the Chinese treat our politicians like adults.
Chinese labour, machinery, Chinese everything is built into the loans, that's one problem - very little local firm participation. Large chunks of the money doesn't even touch Zambian hands. The infrastructure projects are almost always superfluous and fail basic cost benefit thought.
It all comes down to LIMITED OVERSIGHT. S.S.A leaders can't resist this, the Chinese know this. A bill almost passed in Zambia that would have granted the previous Govt the powers to effectively borrow without parliamentary oversight..Just let that sink in.
A new road to some village somewhere with a 100'000 inhabitants(votes) and a grand total of 50 vehicles(I exaggerate) that'll be littered with potholes in 3 years(I slightly exaggerate) keeps the leaders in power long enough for foreign resource exploitation. And when we can't pay, because the project was always economically unviable, as that was never why it was bourne in the first place, we renegotiate with the only currency African countries really have, resource exploitation.
At least that's how it looks from where I'm sitting.
Makes sense. The roads that pass cost benefit analysis would already have been built.
They treat politicians as dirty and corruptible adults they are.
Their plan was never to build anything useful for the countries, they are indebting everyone they can economically, politically and militarily to expand their zone of influence.
Their only mistake is that they rely on political structures being somewhat stable and countries honoring any of their previous agreements at all.
You sound smart akwenda you see this for what it is a clear debt trap that even if the projects aren’t finished or don’t benefit the local population or economy China still gets the land and naval bases. Two things are clear, China is aggressively expanding through debt trap diplomacy and will in time take over economically and once it has enough military bases to fight the U.S. then global communism commencement will start its very clear here.
Yup, sounds about right. Thank you for the insight.
Unsaid here is the requirement of many BRI loans to employ Chinese companies using Chinese workers. This greatly reduces the economic gains such a project should provide by generating jobs for the local populace, income for the economy, at an increased tax base to help pay off the loans.
Most of those loans go back to the Chinese economy, they don't even hire local workers (and if they do, they work under brutal, colonial-like conditions).
Exactly. Infrastructure investment is good only in certain conditions.
Sure lend money, then use Chinese companies and low skilled workers where the project is done, so that there is even more reason to do China bashing. And btw, there is a lot of local training using those infrastructures project.
According to your profile, you are probably not from the countries receiving most of the benefit of the BRI. So all you know is to smear and belittle China and the others countries taking part of the project and profiting.
Keep badmouthing all you want, those countries are developing, and once they will be developed country your country will become insignificant, your value as a human won't represent more than any other.
@@wiiistful7499 how many cents for this comment? 🤔
@@wiiistful7499 As a citizen of a Chinese pseudo-colony in Latin America, I can confirm that China deserves to be bashed. I’d rather be America’s backyard than China’s banana plantation.
China treats BRI projects like its own domestic infrastructure projects- as jobs programs for Chinese workers.
As noted elsewhere, BRI projects are built using imported Chinese laborers, materials, and equipment. What the recipient country gets is a piece of finished infrastructure and a debt to pay off, but little else.
The problem for the recipient nations is that many of the BRI projects are massively overbuilt and requires a volume of shipping, traffic, use, etc that simply does not exist and will not exist in the foreseeable future. That said, the same is also true for some China domestic projects: several HSY routes are simply not commercially viable.
The problem lies in that the recipient nations are doubly burdened with both the debt of the initial construction and the high cost of maintaining a piece or infrastructure that has too much capacity for current needs.
It's entirely possible that the value of the projects for the Chinese was that they employed thousands of Chinese for several months/years.
I agree. They should have mention that in the video. Infrastructure project are usually good but only if they are appropriate for the need of the country, when the cost/benefit ratio is good. Which often was not. These Chinese projects also did not have the benefit of getting money to local workers and local companies which infrastructure projects usually have, so the possible positive efect was lowered.
Exactly, but people don’t understand this, how these government leaders have allowed this is beyond belief.. I’ll never understand, other than these leaders get paid off to accept it.
what i dont get is, they must have read ALL OF THE agreement about the BRI that they accepct right?
so why the fuck do they accept this obviously debt trap? fuck the CPP ofc but i dont get why would they acc the deal that would screw themselves? and then proceed to blame other for your own decision to take up the risk??
@@hypocritelife8018 Because the corrupt kleptocrat in the poor country that is approving the BRI project is expecting to siphon off a fortune for himself and his family! And all it costs is screwing over his country down the road.
@@hypocritelife8018 I'm willing to bet it has to do with corruption. It can be very tempting when accepting a loan for politicians in less developed countries to embezzle money that is meant for infrastructure projects into their own bank accounts at the cost to the country's finances.
This is why the USA just calls it aid and doesnt stress about repayment lol
China deliberately gave loan to Sri Lanka for Hambantota port knowing very well that the project is not feasible. There game plan was to always use that port for military purposes against India. So when they lent to this project they didn't fund the project from economic point of view but from strategic and military expansionist point of view. Results of expensive Chinese loans are there for everyone to see how countries which participated in Chinese BRI are falling like 9 pins.
The point of the whole BRI isn’t even to help out developing countries as well
One issue is whether or not the debt is in US Dollars or Chinese Renminbi. If it's the latter, and China's debt-ridden economy crashes, then the repayment may be much easier since inflation will have diminished the value.
China currency is artificially kept down to boost exports. So i don't think it will depreciate.
I am sure China would want to be paid in USD not Renminbi. Even if, where and how would say Sri Lanka get the Renminbi? Buy them for USD or whatever is available
Irrelevant as China pegs its currency to the U.S. dollar. The only issue is enforcement of loans: China is much cooler in dealing with other countries than the U.S./IMF/WB are which is why countries CHOOSE to work with China.
@@003Shashank Anyone who claims that currencies are “artificially kept down” is an idiot.
Then again, you’re from a country where the rupee is at an all-time low as the U.S. exports inflation to your country. Cope harder.
@@MCRuCr Quite the opposite, in the past 5 years China has reduced their dollar allocation in its portfolio. Plus China doesn’t need to ask for payment in dollars since it can easily buy up Treasuries if it felt like acquiring dollars.
China has spent the past thirty years crash-industrializing its country and building enormous amounts of (sometimes economically unviable - see all the high speed rail lines that go to low-population areas) infrastructure. Now that China approaches the group of high income countries, it is rapidly reaching saturation in terms of infrastructure.
Imagine you're a business in China that just builds roads. Now they don't need as many roads as they used to. You could a) just lay off a bunch of staff and slowly shutter operations, or b) go find third world countries that need roads and get the government to give them loans.
This is the real reason that China is giving all these loans. That, and the obvious fact that these countries ***very much appreciate*** the money, which is good for China's long-term diplomatic power.
Railroads are always economically unviable, the only metro system in the planet that is net positive economically is the Hong Kong one, and it's not because of the metro itself, ut because of how high the price of land renting is. Railroads in China are used as a way to connect a gigantic country with dozens of cultural distinct people, it's a way to promote cultura exchange and avoid turmoil. Not everything is about money, otherwise the US wouldn't have invaded half the countries it invaded.
@@matheusd.rodrigues429 Railroads as a stand-alone are loss leaders however the positive externalities caused by ease of commute and greater connectivity improve the nation’s economy as a whole. China understands this well while neoliberals don’t.
Also, the leaders in the developing countries are highly corrupt
@@PutXi_Whipped Neoliberals understand this, but they also understand that having rail lines to areas without much prior people living there or a high concentration of economic activity is essentially just waste. China tries to play it off as trying to spread more activity in these locations and interconnecting the country, but that's eyeroll worthy.
I mean the point of building high speed rail in low population areas is to increase the population in those areas...
In Cambodia, the debt trap is very clear, to the point that the Cambodian prime minister calls the country to start using the Chinese yuan as the de facto currency along with the national one.
Roads to the pristine forest to resorts built for rich Chinese tourists (who are famous for not having any decorum or respecting things like keeping the environment clean) and Cambodia's most famous tourist destination for both local and foreign tourists have become a no-go zone as the Chinese have pushed locals away from their homes by hook or crook, and pushed the prices beyond what the locals can afford, expensive hotels and casinos have been built directly on the beach to cater the rich Chinese, preventing anyone local using the beach that was once a popular meeting place for young lovers and the only recreational destination for families: visas for Chinese businessmen have wavered and there is nothing the police can do.
Cambodia snould of recognise taiwan over the mainland its the main reason my country stayed with taiwan becaise PRC death trap policy
I saw a documentary about how these special economic zones in Cambodia are more like special crime zones because organized crime operates all sorts of scams in these areas using forced labor by people who were trafficked into the country under false pretenses.
@@GenerationZ313 All I know that when they building the casinos, rather than employing locals they imported Chinese workers, and when the economy crashed the workers were left behind with no salary, not being able to communicate and no right to work in any other business - not that the unemployment wasn't very high already, having been mostly a small, sleepy town.
There is no problem here
This was intentional all along
Give loans to developing countries that they have no hope of repaying ever
Force them to use it to build infrastructure that benefits your economic needs (such as roads for exporting your goods)
Then after the country inevitably defaults, seize the infrastructure, and essentially force the developing country into political submission by economic starvation by denying use of the infrastructure.
How do you seize the infrastructure if the country says no?
Basically what the US has done for some time, only bigger and more aggressive
Yet it backfire hilariously. And China getting shafted is deserved.
@@westrim They cannot say no because the loan contract contains what the loan can be spent on and what the consequences of default are. There is no choice here
@@CarlosKTCosta The US didn't effectively force you to include ceding control of the infrastructure in question like China does though. Yes it wasn't "worth it" to default, but you weren't entirely crippled by doing so
2008 Great Recession happens in part due to lending to people who can't pay back:
China watches as it mostly passes them by: Thankfully this could never happen to us!
China a couple of years later: Hold my Baijiu.
Cant believe that 2008 crashed changed everyone lives, literally. People have become homeless, died, unemployed, ambitions the future where we would of been, its rooted in that. And our generation what could of been with people and their circomstances held back on hold. Back then for our generation as we were all at school when this happened, different place then. 2016 and up now u really felt the ugly side going on around here with people, the people that fell in that pit that attitudes said deserved or didnt, it's the attitudes surrounding it that took advantage and made this crap who we perceive as right by circomstances to treat people like crap. Honestly we all had to pay a price somewhere with this.
That was the point. The Communist Party will force these countries to default so it can lease bases and other strategic stuff. It's the new form of colonialism. Belt and Road were a front for it, it was made so that if it actually worked it would be alright, but if it failed it would be even better for the Communist Party.
It's working _exacty_ as intended.
Countries have already "paid" by using Chinese companies for the projects. Defaulting will allow China to "lease" valuable military bases and ports or strategic resource production in the country as is stipulated in many of these contracts.
And how is China going to default on its own debt crisis? It ain't. The CCP is FUCKED!
I guess it failed in the sense that right now they could use that money they are owed, but won't get it back.
What contract does contain the military base lease clause?
@@exandil6029 No one outside of the parties involved have access or can view those contracts. We only see parts of what the contracts entail when they manifest themselves in the real world.
@@ruekurei88 So we are just supposed to believe you thanks random dude on the internet
I'd love to know how S.S. Africans feel about this if anyone has a reliable link. To me it just looks like colonialism 2.0: first build stuff for trade, that trade becomes economically vital so best to interfere with the politics to ensure favorable protections, then kinda-maybe just take over in some fashion. But I imagine China has a lot of "wasn't an empire [here at least]" credibility currently compared to the alternatives?
very mixed feelings from what i heard. Spoke to a friend from Malawi about this. Their government broke ties with Taiwan (which provided them with medical and agricultural assistance) years ago and instead recognizes China. China built them a lot of infrastructures (roads & stadiums) but also as many have pointed out, the contractors are all Chinese companies. The supervising positions are all directly from China, and often mistreat the local labors at the bottom. Also, Chinese businesses flood their country with cheap counterfeit products. Despite all these, very few people are considering going back to recognizing Taiwan.
This video is biased tho, China don't go offer to loan countries money or build them any project, their leaders who go looking for Chinese help.
As several folks have noted, BRI was never altruistic. It served Chinese needs:
1) keep hyper-financed and over capacity industry (concrete, steel) and construction companies busy now that there really isn't much to build in China that makes any economic sense
2) suck up to 3rd world countries to buy their support, expanding China's diplomatic footprint
Unfortunately for China, the CCP is finding out why Western countries and the IMF stayed away from these projects - some are vanity projects (an airport near the dictator-for-life's home town, palaces, parliament buildings) that provide no economic value; projects that have no hope of ever recouping their investment (e.g. Shri Lanka's infamous port-to-nowhere); or where countries simply don't have the financial ability to manage/make them viable or there are missing elements to make it work.
So predicably many of the projects are going belly up.
In some cases China can be ruthless and seize assets, like they did for the Sri Lankan cargo port. In other cases there may be debt restructuring. But so far China is **NOT** doing what the Western countries/banks or IMF do which is write-down/forgive debt, so far at least.
Which brings up the accusation of predatory debt-trap diplomacy. This suggest that the Chinese knew what they were doing (#2 above), and want to have financial subjects. But it is looking increasingly like the real object was a desperate attempt to just keep Chinese supply and construction companies busy (#1, above). This is short-term Chinese thinking, so they'll learn a hard lesson.
Exactly TLDR is usually good at covering various points, but this was a half baked episode....even outright lies that "China forgave loans in vast majority of cases"..
Great read! Thanks for posting. It's worth mentioning that the Sri Lankan cargo port wasn't seized by China nor was it ceded to China. The port was privatised by a recently (at the time) elected government in an attempt to balance the books in the face of default over debt. This debt was previously received from the broader International community and was not of Chinese origin.
The privatisation has the port on a 99 year lease with a 70% stake to a Chinese investor who brought in $1 billion which was used by the Sri Lankan government to pay off part of the debt.
In terms of payment issues, China has historically not seized assets before, but Sri Lanka is often falsely cited as an example.
China has re-negotiated payments to the favour of debtors when they have been unable to pay, and has also written debt off.
As of now, the debt trap diplomacy is a myth with no basis in fact, but it could be a concern for the future.
Similar predatory claims have been made about the IMF. I find these claims are amplified and exaggerated based on foreign policy ambitions, rather than any substantive reasoning.
www.bbc.com/news/59585507
www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/
You missed that a major part of the "debt trap" is that China lends to projects that are not viable. If the bank lent you a bunch of money at a high interest rate for business selling AC units in antarctic, it isn't hopelessly naive. It is setting you up to fail. China can "win" in debt trap diplomacy without getting anything material itself.
There is no debt trap. Other UA-cam videos has already debunked this. The debts that these countries have a hard time paying are mostly from the West.
The Chinese 'Debt Trap Diplomacy' is a Myth! The lie about China the world got used to.
ua-cam.com/video/SZp0zIr6z3M/v-deo.html
I actually have a pretty good explanation for the Belt and Road Initiative and why China engaged in it. It was not primarily for world domination. It was not primarily to have more influence abroad. It was not primarily to make profitable returns. The primary reasons were the following: 1. Ensure consistent employment for Chinese workers and 2. To offload the excess manufacturing product in industries such as steel and concrete. After about 2010 the Chinese infrastructure development domestically began to slow in its returns - meaning $1 dollar in debt for infrastructure would return less than $1 in GDP growth (Through the 90s and early 2000s $1 of debt for infrastructure might return $1.50 in GDP growth - thus making financial sense). So by the year 2012, Chinese factories were producing more concrete, steel, etc than could be invested/used domestically. That is when central authorities devised the plan to offload this excess manufacturing capacity into other countries. Sure there were other reasons as well, maybe some extra international influence, trade position, etc but the primary reason was to maintain employment and ensure Chinese factories continued their growth and production levels. That is why we saw the B&R Initiative start in 2013 - right about the time that domestic infrastructure investment began to become seriously poor financially speaking. Property developers did not stop the overproduction until the three red lines law was enacted in 2018 and the fall out from this sudden brake is still being played out; same with the B&R initiative as this video explains
If Chinese want to earn Africans' money, they need to have enough money, that's why Chinese like building infraconstruct to develop there
Agreed.
exactly right，world domination may be one of the reasons of the BRI.but not the first
I think the BRI is all of the above. There is no one single reason why it started the initiative. It is partly economic and partly political and I think if any individual project hits one of those outcomes then China will see it as a success. No country goes around the world throwing money around without some political ambitions and China definitely wants to be seen as a superpower so what better way to show that than to look like it is helping developing countries grow their economy? But China doesn't have a magic money tree either so it does need at least some of these to be economically interesting. Whether that's a stronger economy in these countries who can pay back the loans or whether they remain weak and just service their interest payments. The exact methods are different but it's no different to when USA used to throw money around the world to developing countries. And if people are worried about China taking over other countries then just look at how many military bases USA has all over the world.
China will have made some mistake in some of these projects that absolutely won't pay back and will likely have to write off a lot of debt but again, that's no different to the billions (or trillions?) that Western countries have had to write off over the last 3 or more decades. In a way that's the learning process for China in the same way that those lessons led to Western countries not so willing to lend money these days without very stringent terms.
@@ruan13o 1. I would argue that there was a single reason for the creation of BRI and it is the offloading of excess domestic production particularly in steel and concrete 2. I would argue financial aid, without heavy chains attached, is far better in establishing soft power; china could have followed the decades of Western examples in this regard 3. It is different historically to what the US has done - the US donates financial aid, without requirement for repayment (so do all western allies) and lets the free market dictate financially viable infrastructure projects (this can be seen with investors interests in buying Chinese bonds to fund domestic Chinese infrastructure projects - China was built with Western finances) 4. Again, it is different than the West in that the West historically lets the private market fund infrastructure projects abroad outside of periods such as rebuilding after WW2 - China has differed in its sheer scale and in the lack of credit worthiness in the borrowers (France, Germany, Japan, South Korea, had all been good borrowers before needing to be rebuilt)
HA! "Help" with construction. No. They primarily employ their own people to employ them not to "help." Also lots of the lower level workers are not skilled workers. According to friends in Sri Lanka the workers are convicts.
I noticed that statement too. He seems desperate to avoid mentioning its a way for China to plunder Africa
Sri Lanka's debt is 10% to china
90% of debt are owed to other lenders.
Not too sure what the level of debt to China of other countries are.
Pretty much the same worldwide. Everyone wants Chinese lending, but won't go over 10% of sovereign debt for risk. Most developed countries are 5-10% of all debt being Chinese, except maybe Japan? I'll have to double check them
Sri Lankas fall is not just Chinas fault, however their loan was probably what put them over the top. They were heading that way no matter what. A high interest loan to China most likely didnt help.
Countries that take loans for BRI initiatives lose out big time because the money is only allowed to be spent on hiring Chinese companies for the projects so very little of it makes it into the local economies. My ex worked for a big company that built uranium extracting facilities. There is a bidding process but it’s just for show, the selection committee gets a cut of money, then the contract is awarded to the Chinese company. More over, the high paying jobs are only given to Chinese workers. As an example, my ex made the equivalent of about $5000 per month while local workers were only paid ~$500. This was the case for all roles. Further, Chinese workers are required to live separately from the locals. Likely to prevent the spread of disease, but it further limits the value as there is no cultural sharing. This is the case for quite literally every single project as this. Recently one of the companies I own in the Philippines collaborated with a BRI project and it was the same case where the Chinese company was required to do the main project, there was a little tinker town set up near Manila, and they went to build a hydroelectric plant. So of course it’s messed up, there is so little value in the project, there is no revenue generated to repay the loans.
China is learning, the hard way, why others were being so cautious about lending money to those countries. Nothing beats experience.
If the BRI wasn’t an attempt to grab power, I don’t think the G7 would be stepping up and wanting to offer its own high-risk loans, especially in this economic climate
Rhodium group is heavily tied into China and CGD funding mostly comes from outside the USA. The point of a debt trap isn't for the loans to be paid off, so I'm not sure why you'd think that would be a valid counter to debt trap claims.
Yes I was just going to comment this
Not only that but China is one hell of a Xenophobic country
People will literally come to you and ask if you're not ashamed of being so dark and are not allowed in certain places
So lending money to African countries should sent some alarms off immediately
Sooooo if it’s funded by non US sources, it’s biased??
@@user-sn3oz7jk8g +200 Social Credit Score
*Attention Citizen*
_For Upholding the honor and integrity of great Ruling Government, our beloved and charitable leaders Xi Jin Pooh, awards you with additional 200 Social Credit to you, ON THE SPOT_
_Much Love_ , the CCP
I wasn’t sure why they were saying that was an argument. I’m a big fan of the channel, but they have had some odd arguments on several videos lately.
@@danielstewart8339 not just lately
This channel is left leaning and often omits info like SaintAlia pointed out
A few months ago the talked about a party on my own country and considered it extreme right when they infact are in favor of gay marriage and have one of only two currently black ministers in Parliament, very fascist indeed
All I'm saying take all their news with a grain of salt
They can never admit a left leaning/communist gov is corrupt/failing
I thought China secures all loans by real values, which goes into chinese ownership if the loan cannot be served. For example Montenegro has to give its habour into chinese property, if they cannot pay the loan for a (luxury) motorway back. Also all african nation have to give the ore properties to China, if the loan is not served. Furthermore China plans to build a tunnel between Helsinki and Tallin for 20 billion Euro. And if Finnland cannot serve this loan, all ore etc. in Finnland becomes property of China. And China wants to use the tunnel to transport the ore from Finnland of BRI railway to China. If the EU allowes China to build this tunnel, it is an economic suicide of Europe and an independent european economy. Only for a Tunnel, were fairies are available. So Chinese dept trap is much more, than a bad managed money banking game.
The problem is, and I am Kenyan, we Africans are terribly devious, incredibly devious. So the Chinese money they lend gets stolen, prices of goods gets inflated and some of the agreements are totally unconstitutional and hence it is only a matter of time before African courts start throwing out agreements claiming they are unconstitutional and seizing Chinese assets and there is nothing China will do because we Africans will scream RACISM AND COLONIALISM 😂😂😂
It may seem naive, but just 20 years ago, we got Europe and America to wipe off our debts by shouting RACISM AND COLONIALISM.....
Wouldn't be surprised if it works again
I do love the idea of a fairy-based transportation system, with wings and dust and all.
You forgot that the infrostructure should be build using chinese supplier and labor. Meaning that the loan, minus overhead, goes back to the chinese economy.
Finland is one of the best run countries in the world. With their tiny population they managed to hold their own against Soviet Union. There is 0 chance that Finland would bet anything serious for Chinese money.
Fairies wear boots
Could you please do a video on the economic decline of South Africa and its energy crisis?
And this is why the idea that the belt and road is a debt trap diplomacy is wrong. The sheer amount of debt here is insane, and nothing China gets from them doesn't cover the loss. What happened here is that China relies on construction to generate growth, so when it ran out of projects in china it went abroad for projects in other countries. This is why all the projects are built by Chinese construction and Chinese Laborers rather than local equivalents. The belt and road is just a means of directing and controlling what was already happening.
It seemed a plausible idea when China was taking control of the infrastructure involved, like the ports. But as the debts turn into political instability, even collapse, whatever China *thought* it was getting doesn't really matter anymore. Because what they *are* getting is massive losses and resentment.
@@watchm4ker I mean, they were getting that from the very beginning? Because The projects not only didn't turn out as intended (because they were typically non-viable plans to begin with) they didn't create jobs to bolster the local economy or were built to any sort of standard because Chinese construction. The fact that said Chinese construction has no respect for environmental concerns just makes it worse. If you look back and do some digging you can find that the whole loan thing started not as some political plan, but as a means to keep Chinese construction companies in the green by any means necessary. The politics came afterwards when the people in power saw an opportunity to use what they were already doing to their advantage, but even then it wasn't via a debt trap system.
@@JH-ph4qb Probably. It just seemed the likely intent at first, particularly with the Hong Kong-like 99 year "lease".
@@GeorgeWashingtonLaserMusket The question is if this was intended from the outset, and as J H argues, it was probably a phenomena that the Chinese government tried to expand and exploit.
The problem is, debt between nations is a much riskier tool than a debt between a person and a loan shark. Countries can simply default, even walk away from their obligations if it threatens national stability. After all, if the government falls, the new one will take a dim view of maintaining the old one's obligations and agreements.
Usually, this would be the time for the Empire to send the Marines and start seizing territory to 'defend their interests', but China doesn't seem to have the expeditionary-focused military to pull that off, unlike the UK or America. Especially when those interests are on the far side of an ocean.
@@GeorgeWashingtonLaserMusket Because the intent isn't to take the ports in the first place. It just seems that way from the outside at first glance. The fact that China actively tries to resolve these issues before it gets to that point is proof of that, because why try and assist the person in paying off the loan if the point was to trap them in the first place? Yes, they have high rates, but that is because of the risk involved in the loan, because thats how loans work. More over, while it might make sense for some of the deals, it doesn't make sense for the majority of them given that China gets stuff thats worth less than nothing typically. Ergo, the loans are not intended to fail from the start, they fail because of poor decision making all around.
I personally love how the Turkey and Ukraine graphics are switched at about 5:27.
China has always known this will happen, they are completely ok with the defaults because they gain access to strategic resources in debt traps.
Seem like China may have know the plans would be defaulted upon and have used it as a way to gain assets in trade.
Interstin in the video was the next step: Having to continue to lend money to keep the country stable to not loose your newly bought assets in uprisings.
China should have waited till their Navy was big enough before they threw all that money out around the world lol
I hate loans to begin with. You have to pay that debt.
And this is how it became a factor to Sri Lanka's downfall. And other countries will soon follow.
It's why I'm happy my country has really low debt to gdp.
Bankruptcy or debt forgiveness
You DON'T have to pay debt.
It's when there is a lot of corruption it get's bad. Then it ends up with some rich guy's running away with the money and the countries is left to pay without getting much out of it.
I remember reading about a Canadian diplomat being approached by a representative of an African country who proceeded to argue that Canada's loan to his country should be forgiven. The standard spiel. Five minutes later the representative returned to the diplomat to argue for a new loan. China will be in for interesting times in Africa, chortle, chortle.
Quite a few of these BRI infrastructure projects were not original ideas but were based on previously abandoned projects. That Sri Lanka Hambantota port project's original feasibility research was funded 75% by Canada's CIDA. Gwadar port location was surveyed by the USGS in 1954. There are a multitude of reasons why a lot of these projects never borne out; politics, corruption, economic non-feasibility, security issues. Now China dumped massive funds into these regions, they will get a front role seat to see the consequences of imprudent investment.
I would absolutely jump with joy if you made a markets / economy channel. All sources I’m coming across are either cookie cut publications that aren’t independent (tethered to WEF for example) or are too bonkers (the end is nigh types).
You got the Türkiye & Ukraine icons in the wrong order.
Its fine to still call them Turkey - they are just throwing a hissy-fit
While a lot of these debts might have been deferred or written off, it is still highly plausible that the belt and road initiative is a political one. The initiative allows China to get access to strategically important ports, invaluable natural resources and political influence within in these countries and on the global stage.
Part of the reason that why this belt and road initiative is turning into a bit of aa shamble is because China is getting caught up in a perfect storm… the pandemic is a one in a hundred years black swan event which has disrupted global trades and supply chains while Xi’s hard-handed approach to its property market has completely destroyed this market which is responsible for roughly 25% (can’t remember the exact number) of its GDP…
Chinese policymakers have had a good run… but right now presents an actual test not only for their resolve but also whether their ideologies actually work… it’s easy to manage your economy when things are going good…
If anything was to happen to China, countries with high economic connections with China will be more affected than countries with Chinese loans. China major trading partners should be more worried about China crash than some poor third world countries. Many countries that keep touting Debt trap diplomacy have a high dependency ratio to China’s economy.
More and more western countries are re shoring production to be less dependable on China.
Like the USA ?
Look at the numerous white elephant projects such as the Hong Kong-Zhuhai-Macao Bridge, High Speed Railway and third runway in Hong Kong, which is a tiny city of the giant China. One can imagine how many white elephant projects existed/exists in China. And now the Hong Kong government is promoting another white elephant project: the East Lantau Reclamation Project.
Being able to say things like “From Addis Ababa to Djibouti” ’is a perk for being an anchor(?) for TLDR
It's also not a very impressive distance. Addis Ababa is the capital of Ethiopia and Djibouti City is the capital of Djibouti, which are neighboring countries. They're 775 kilometers apart from each other, and you can drive there in a 12-hour trip. Or you could just fly from one capital to another in an hour-and-a-half-long flight.
I know this sounds harsh, but I don’t feel sorry for a lot of those countries. They’ve been warned about this and still took the loans. Me as regular person can’t take on too much debt, so why does a nation do this? I don’t want those countries to lose their national treasures, but they were warned about this.
Crooked politicians love those loans because it helps them boost their electoral campaigns. For example, a lot of left-wing presidents in Latin America heavily indebted their countries just to build infrastructure and get re-elected. It worked out pretty well for them, but now they are struggling to repay China.
USA/UK debt ughm
More excellent news, thank you!
Can’t spell Mafia without IMF
well china is nxt or in the list on the chopping block bec of debt trap tactics
And in economic bad times some poorer countries people might resent certain infrastructure or other things owned other countries. Not saying it is right or wrong it’s just what is bound to happen throughout history.
As a Moroccan i would have loved to see those 52 countries in economic trouble in africa
Great video!
"It's normal for chinese lending is often at a higher rate than other countries and so debt trap diplomacy claims are mostly unfounded."
Ahah, no. Absolutely not! How did you get this so wrong?
If you're lending money to a country in a way that basic economics tell it's not benefitting it's economy but for the shortest of terms (like Chinese sponsored corruption and white elephants), and on top of that you're doing at a high rate because it's a risk (because of course it is, the way investment was planned with your approval), and ON TOP OF THAT you impose that chinese national companies do most, if not all, of the work that money is going to - essentially injecting money into your own economy -, this is not normal investment at all.
Compare that with the foreign investment in China for the last 50 years, they know exactly how money can actually help 3rd world economies whilst beneffiting the investor long term, they just don't want to.
It's the mirror opposite of the Marshall Plan.
Tell me how much of sri Lanka debt is held by Japan or the world bank compared to China (hint: they're both a bigger percentages than China). If you're going to say that china is doing this nefariously then what makes them worse than IMF loans that require privatizing and austerity, or any other country's loans?
@@SolarEmbrace wumao
Only 10 percent of Sri Lanka's total debt is lent by China though
But China's investment is in an area where there is no chance of profitability. Forcing Sri Lanka to handover the projects (Hambantota)
@@aniketanshumali393 you borrow money because you think this project can be profitable, not China force anyone to borrow money
@@aniketanshumali393 no one forced anyone they were the one who suggested it. If they didn’t want to give the port they didn’t have to. No one can force takeover of infrastructure, they had a crisis and had to pay the debts of the other banks and suggested cash for the port. If anything Sri Lanka had a huge mismanagement problem.
@@ellenation2294 I Guess you guys don't understand corruption at all. The less developed countries are also more curropt and it is easier for them to give officials some incentives to approve a project. That's one of the reasons Sri Lanka's politicians are enjoying in a foreign country leaving common people to suffer in the mess.
And they have international contracts to follow, if the country is not able to pay the loan, the project will be transferred to the bank. Have you guys ever taken any loan from any bank? It is the same thing + international laws.
If not, any country in the world can take a loan and refuses to pay it back..
@@aniketanshumali393 No I’m saying it’s very convenient to always blame China. When truly this goes both ways. The crisis that happened was not chinas fault it was the fault of the corrupted mismanagement of Sri Lanka’s government which the PEOPLE chose. Sure I’m the the people suffer but no one forced them to take all the loans and bad plans. They should have analyzed it and scrutinised the contract and see whether it is sustainable.
If nobody reputable will lend you money and you have to go for loansharks that ask for 13% interest and the building as collateral, you probably have a idea that isn't viable.
800 billion? Thats it? Regarding that China has a annual GDP of 15 trillion it will hurt if everything goes down south but its hardly a crisis. The trillion $ that the US owes China are a much larger issue because if the US goes insolvent its on a completely different scale then all these developing countries combined!
Sure.
I’m a huge fan.
Just a small mistake in the video (though only visual)
Whilst listing countries china sent life line loans after saying turkey and Ukraine you added their flags in the wrong order.
It’s not a big problem but I’m just one to point them out
Keep up the great work
huh? the debts were never intended to be repaid, it's to seize assets & land.
Which could easily be nationalized.
Great video
Since these loans are underwritten by the Chinese central bank, it actually has *no effect whatsoever* on China.
China (and any country with currency sovereignty) can pay all of their obligations denominated in their currency.
All this means is that China can claim the assets and continue its BRI.
they would have no effect if the loans were in yuan, but they are usually in dollars, dollars chinese make by exploiting their own ppl and resources sometimes at a loss to gain market share.
I’m sure China is lending loads of money out of an overwhelming desire to uplift poorer countries around the world. Beijing is perfectly happy if countries default on repayments 😂😂😂
Sure dude, keep coping.
MEANWHILE #MAGAfascism and Brexshit is hardly a healthy society.
Yes they aren't bunch of xenophobic bigots, slowly replacing the African countries people with Hans Chinese, and getting all their land and infrastructure at all
I don't think China's main intentions were to uplift poorer countries out of poverty but more so to increase its international standing. But at the same time, I don't think China's primary intention was to see the countries default and debt slave them as Western Countries believe China to be doing. Its more so China is trying to do business with countries that the Western Countries didn't want to do (for good reason of course) and greatly overestimated its ability to carry both sides of the deal (ie, China is pretty much giving out aid in disguise of loan, but greatly overestimate how corrupt some of these governments are).
If this was really such a big issue the EU and G7 would not be so eager to get involved.
I'm not saying China is some kind of James Bond villain entity because the US has done this in the past, just like Russia and many EU countries. What I am saying is that this crisis was already predictable and thus somewhat part of the plan
In many projects, China did not lend "help". It was written into the contract that they had to use Chinese workers.
Don’t forget about the PCII deal
China's lending is similar to the US predatory, low income lending that led to the 2008 recession. Just on a larger scale. We know how that ended.
The diff is that those were private American banks screwing over folks, this is government directed banks.
x to doubt
@@sinoroman That's literally what it looks like though. Lending to peoples with low credit rating and who can't possibly pay it back, then being "surprised" when the defaults occur leading to the lenders to repossess things to get back they money spent on loans. Like, idk how you can deny this.
Personally i hope their debt crisis wont be solved tbh
The graph at 7:38 does not show what you think it shows. It actually offers very little info.
"and how it might be solved"
Simple. By handing over strategic assets to China. That's the least you can do to fulfill your servitude to China
I'd rather Chinese debt than IMF debt. China builds roads, bridges, ports, railways..tangible things that cannot be moved out of a country. Even if a country defaults the road or bridge is still there. People really don't understand how crucial infrastructure is in a country.
That infrastructure belongs to china who will not let you use them if you default of your loans 😂. Chinese built anything has a short life span anyway, look at all those crumbling ghost cities that are only 5 yrs old 😂
@@bigboss337 😂😂😂 how will China not let you use a road in your own country?? That's the most idiotic thing I've read in a while. Tell me where its happened
@Olaf Sigurson 😂😂😂 Oh white people. So arrogant and misinformed. I pity you guys
@@bigboss337 Unless the Chinese have a military presence in said country, they couldn't stop the people from using the infrastructure built
2:30 the EU of G7 simply announcing an equivalent to BRI just doesn't cut it. Knowing how western countries are, they will impose conditions socio, political and economic conditions to their loans.
I think this is the reason why many "non-creditworthy" countries avail of BRI loans because they want the money but not the change.
I am not saying the west is wrong for putting conditions to their loans. However, if they really want to counter the BRI they need Western BRI sans conditions (human rights, gender, ... etc.) they are known to impose using other western credit facilities.
I am a Filipino, though my country availed of BRI loans our exposure isn't that big. We avail much of the ODA thru Japan which like China offer "cheap and easy" credit without the socio/economic/political conditions of other western countries.
True. The West will use all those bullshits like "minority rights, human rights, etc" so they can lend money to them. How will a country like Sri Lanka make human rights?
Wise words, and great point.
I agree with you but what does gender have to do with anything? Western Women are not oppressed...
Also Japan is apart of the G7..
The BRI is lender of choice for dictators and despots worldwide.
Only one way. Go deeper into debt.
It's almost as if the traditional thinking as to why these loans were a bad idea were correct. Who would've thought?
Mastermind or naieve is a perspective. If China's plan had worked they would have been seen as a mastermind.
The reality however is that China is new on the international scene. They made a judgement mistake in the attempt to quickly gain global influence and control. As a result they are stuck upholding economies of other nations while having their own internal problems.
Globally it is going pretty poor in general. Thou I get a strong idea that the downturn in the U.S. and E.U. are far more controlled and manageble. Russia is basically in freefall (I know, their Ruble is strong, roles eyes). China seems to be chewing above their own head.
Are you sure China's plan didn't work? Other videos (Like the one by Vox) have made the point that by putting countries in debt, and forcing a renegotiation in favor of themselves, China has gained key strategic ports and other infrastructure around the world. Also known as debt trapping.
@@whaleio9476 Yes. It is what I and this video are pointing out. Debt trapping is pointless if the nation default and gives you a valueless IOU. Then you take assets of their nation, but they too are junk if the economy is dead.
The whole video here is about that. China is paying for keeping those nations afloat because their debt trapping backfired.
There is a Chinese saying that says, "Help a lazy man once and you are responsible for them for the rest of their lives".
@@josephmungai1799 As a Chinese, i have never heard that saying 😂
@@akak-dw2cm have you heard all Chinese sayings? The answer is no. So don't sweat it, I taught you a new thing today from East Africa, and soon we will teach you new things about not lending money to devious, lying, two timing Afrikans😂😂😂😂😂
Also just so you know Rhodium group is heavily tied into China. So them saying that its not debt trap diplomacy is like China saying its not Debt Trap diplomacy. Not very reliable you know.
This is the result of a persistent imbalance in trade. It follows from the misguided notion that exports are an inherently good thing.
Well, I was always a bit confused by the "Belt and Road" initiative since I am not really well read in logistics, but isnt it easier just built canals and ports for transportation and then train tracks for further inland ones? Instead, they built train tracks through Russia and other countries... is someone read in this stuff? I am really confused why they just don't built canals or the such?
They do build ports, not so much canals _because this isn't the 1800's and modern freight rail is superior to small canals._ The only proposed BRI canal that I know of is the Morava-Vardar canal, but so far it hasn't materialized.
@@MuhammedChand God, Imagine channelizing the Congo river
As Olaf Sirguson said, china is going the rail way (no pun intended) because the US controls the seas. As the relations between China and US + allies sour, they want to have a secure line of resources and market to these countries connected by land.
Theres nothing special about any of it
The reason investments in developing markets brings high return is that it entails high risks
U don't out run fundamental laws of market economy
I like your reporting on China. It's difficult to get critical information on China without portraying them as a sinister, villainous nation. This seems like a fair assessment, in my opinion.
5:26 Lol *Junk*
There’s only so much throwing cash around, before you suffer yourselves, even with fake figures…
“Ah shit, we’re low on cash”
“Yeah, we need a way to quickly create new items in order to pay it off”
“Book a flight to Xinjiang.”
Unrelated but could you guys do a video on the world leaders with the highest approval ratings?
You do realize that dictators will win that one due to rigged elections?
And some contries don't have a leader/president in the traditional sense at all like Switzerland.
World leaders with highest approval ratings are: Xi Jinping, Kim Jong Un, Vladimir Putin, Alexander Lukasjenko. They are so popular that elections are not needed anymore 😂
TLDR (all of them) I like your channels. I like that you bring up interesting scenarios and news some of which are changing the shape of this world. Personally I sometimes find them a little overdramatic but it is a question of taste more than anything.
Ah, money... what a wonderful world this would be hadn't we abused and stretched wildly its scope. "Owe a bank five thousand and you're in trouble, but if you owe them 50 million then the trouble is theirs. Massive loans awakens the greed in people, it is seldomly constructive whilst giving a nice ground for corruption to thrive. In starving countries the temptation is almost unavoidable. Whether they committed those loans naively or with controlling intentions (any kind) is irrelevant. The result is always the same: money is nothing but a system based on faith and as such it turns into dust under pressure. Sadly it brings down with it every form of faith in the future. Argentina, a case I happen to know very well, is a good example, once a thriving country it was flooded with loans during an unlawful military government increasing the external debt by a factor of ten whilst imposing an impossible interest rate. Most of the money vanished into unaffordable projects and corruption. The military government crushed and killed whomever opposed it, thousands were killed whilst thousands of the best and the brightest left the country and never came back. Argentina has defaulted twice since then. The fact that the very same creditors under new names call it a junk economy is ironical to say the least.
On the same lines China has drugged not only its own economy but that of those for which they are heavy creditors. China's future certainly looks gloomy from our perspective but their people have a strong faith in their country, as long as they have that, much like a few countries from the West, they will survive and adapt. They are a formidable force and what would thoroughly destroy any western economy might not do that kind of harm to them.
Again, money has no real value, it is neither a commodity nor a resource, it is what the people that handle it believe it to be. Markets, trades, etc. work within that frame of credibility, if it collapses so do they. I would suggest those who believe trades can be regulated outside that frame of credibility to live for a year in any of those so called "junk countries".
I still believe it's debt trap diplomacy but that's only one piece of the puzzle I mean many of these projects are said by the local governments to provide jobs but them chinese works are sent to complete the projects and some like luxury housing projects get mostly sold to wealthy Chinese citizens, plus there is also good will built governments bought off so they pay off their debts that are also most likely inflated to pay politicians and push their influence. Plus future trade opportunities and resources gathering like in Ethiopia with donkeys
Bro you need to talk about American and Japanese debts
Honestly the strangest thing is these countries pay for projects they don't need. Or projects done by outside sources. In reality they are building infrastructure and servitude to China.
Vanity projects... When leaders vie for international glory/acclaim before sorting out the fundamentals
A lot of economic crisis in China lately...
That is not called "overseas debt".. It is overseas/foreign LENDING. click baiters
There are a lot of instances of bias on this channel that I can shrug off. Like, for example, the bell ringing every time something bad happens in China makes sense to a degree because western audiences want to see China fail and it just gets more clicks. I think it's a little annoying, but I don't say anything because you're just doing what makes sense for you. This, however, just makes you look like you don't know how to research. The reason that China does so many overseas loans is not to turn a profit. Don't get me wrong, they definitely do want to turn a profit, but that isn't why they do it. Maoist theory and, really, Marxist theory more generally, believes that one of the ways that imperialism holds power is through the unequal exchange that results from powerful nations maintaining a low quality of life and productivity in poorer nations to allow for cheap labor to be outsourced to them. China's goal in lending to poor nations is not to help themselves, it is to hurt rich nations by weakening imperialism while creating allies that support China. This is why they focus so heavily on infrastructure that they themselves build. They control where the money goes, and they can maintain it themselves if the country defaults and cannot support it. This also allows them to put infrastructure into the hands of revolutionary groups more easily. This isn't a crisis, this is what China wanted all along.
Imagine being so brainwashed as to think that China gives a rats butt about Maoist theory when they have worked so hard to crush it following Mao's death. The CCP gives lip service to Marxist theory, but often crushes it the second the actual workers/people try to apply it. China in its current state more resembles a kleptocracy than anything Marx envisioned with literal corporate leaders at the highest echelons of the CCP.
Also, TLDR just as often talks about crises going on within Western countries. Its pathetic how hard CCP bootlickers try to frame any Western news which often focuses on negative stuff as if its targeting China for propaganda purposes. Newsflash; 90% of Western news is negative stuff ABOUT the West.
I have my doubts about the motives for some of the loans China has given and that it was seen as a strategic way in, is not unlikely. But if a massive amount of loans go unpaid and need to be written off, that will give a shock to China's financial situation. Honestly, anything that weakens Xi is a good thing IMO.
Don't forget the housing market bubble that's about to burst there as well as the Tofu Dreg projects that stem from systemic corruption.
The 0 Covid policy is hurting the economy as well.
One reason they need to push RMB to become a world reserve currency.
Hate to be the bearer of bad news, China, but most of the loan money has already been stolen.
Hey isn't that the former minister for foreign affairs for Australia at 3:02? Seems a bit out of place...
“Belt & Road” (aka BRI) is Chinese for Collar & Leash… 🤷🏻♂️
Frankly, I initially had a good impression over this channel. Now it becomes more of a stereotypical sensationalist Western media.
@Olaf Sigurson sayonara
The fall of West Taiwan coming soon
"Soon", the word we've used for 20 years now.
Just like a hyped up movie trailer...
The real Republic of China 🇹🇼
Of Chinese nationalism!!
@@J_X999 A hyped up movie trailer? Like "The rise of Communism China" in the last 5 years? Cope harder mate XD
@@nikowritesstuff9505 You lot have been sat on the edge of your chairs hoping for china to collapse. And it seems like even grown men like you latch onto it. I'm coping just fine "mate" XD.
@Zaydan Naufal i can't think of any country with the appropriate letters
when people say China doesn't conquer nations
this is exactly that
just more shrewd
At least they are doing something...
Could you not pronounce Xi Jinping "Zhjee Jinping"? It's not hard. The Zhj sound doesn't exist in Chinese. Xi is pronounced "Shee".
The British have a long and well documented history of arrogantly mispronouncing foreigner's names.
Or just call him Pooh, it's easier. They have the sound "pooh" in China, right?
@@nevarran sure, we would all love to poke fun at the thin skinned despot, but that would not be professional and befitting of a channel attempting to do journalism. You lose all credibility if your reporting resorts to insulting nicknames.
They could have created a super rich class with that money like we have in the west.
Ahhh they have 539 billionaires if that's what you mean? They very much have an oligarch class. If you mean an upper middle class then that's a bit different.
They did that aswell 🤣🤣🤣
It’s far larger than ANYONE realizes. Tens of trillions, not simply billions.
Infrastructure is a good thing to invest and China may have done some beneficial infrastructure project in the third world but many of the Road and Belt projects were not suitable for the recipient countries which were made to pay extreme amounts of money for something they don't need. And one of the benefits infrastructure projects have is to employ local people and give work to local companies which is a way how to redestribute wealth and support local economy. But the Road and Belt project were produced by chinese Companies and Chinese workers so it did not have those otherwise great benefits for the economies of the recipient counties.
Your dismissal of China's debt trap diplomacy strategy shows just how shallow and superficial a channel this is... The scowling picture of Trump you used also goes a long way to showing your commitment to impartial analysis!
I am not first but I hope China will not get payed
Ummm....This isn't bad for China at all!! They can get FREE Ports, Railyards, and Infrustructure, basically going into those countries without paying Tarriffs. GREAT FOR CHINA :(
What you're telling me that debt trapping unstable countries could backfire? Color me shocked