China's loans pushing world's poorest countries to brink of collapse

[dalton99a]

https://apnews.com/article/china-debt-banking-loans-financial-developing-countries-collapse-8df6f9fac3e1e758d0e6d8d5dfbd3ed6

China’s loans pushing world’s poorest countries to brink of collapse
By BERNARD CONDON

A dozen poor countries are facing economic instability and even collapse under the weight of hundreds of billions of dollars in foreign loans, much of them from the world’s biggest and most unforgiving government lender, China.

An Associated Press analysis of a dozen countries most indebted to China — including Pakistan, Kenya, Zambia, Laos and Mongolia — found paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel. And it’s draining foreign currency reserves these countries use to pay interest on those loans, leaving some with just months before that money is gone.

Behind the scenes is China’s reluctance to forgive debt and its extreme secrecy about how much money it has loaned and on what terms, which has kept other major lenders from stepping in to help. On top of that is the recent discovery that borrowers have been required to put cash in hidden escrow accounts that push China to the front of the line of creditors to be paid.

Countries in AP’s analysis had as much as 50% of their foreign loans from China and most were devoting more than a third of government revenue to paying off foreign debt. Two of them, Zambia and Sri Lanka, have already gone into default, unable to make even interest payments on loans financing the construction of ports, mines and power plants.

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[mitch96]

1. What does china want from these countries and what can they take in return for the debt?

Dirt? Minerals? Low cost labor? no cost military bases? .. follow the money
m

[Irish_Dem]

3. All of the above.

[erronis]

4. Obedience. Remove the capability for them to choose other partners such as western countries.

[Crowman2009]

9. Eventually this leads to a mob taking over a Chinese embassy.

Does Iran ring a bell?

[Irish_Dem]

2. This is on purpose, China is creating debt traps.

China will own these countries when they default.

[TeamProg]

5. Maybe, depending on the terms, right? But still, even a drug dealer who supplies addicts / clients

to the point that the addicts fail and can no longer buy the drugs, that doesn't really help the dealer.

Holding bad debt isn't a good investment and in the U.S. doing so will generally cause a companies' stock prices to drop.

I'm unsure if China can actually go into Laos or Pakistan and mine the resources or steal their water.

[Irish_Dem]

8. China has a plan.

Set up the debt traps. Steal all the resources. Gain control of the country.
Set up military bases. All the money loaned goes to Chinese companies pretending to build
infrastructure.

Yes some of the countries are now defaulting. China has to decide to write off the debt
or put good money after bad.

[TeamProg]

6. China's # 1 goal is to get other nations to trade in yuans. China wants the yuan to take over the

Dollar in international trade.

Just like Putin and his rubles..

Not likely to happen, nations do not trust China and the above news piece is a perfect example as to why.

[Irish_Dem]

7. #1 goal is to become the 21st superpower with geopolitics in their favor.

They want control of most of the world.
But yes the global yuan is a goal but not number one.