Communist China’s Debt Trap Protocol Is A Scourge On Civilised Society

Jan. 8th, 2022

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According to a story by the BBC on January 6th, 2022, it talks about how China has faced criticism for its lending practices to poorer countries, accused of leaving them struggling to repay debts and therefore vulnerable to pressure from Beijing. But that is rejected by China, which accuses some in the West of promoting this narrative to tarnish its image. It says: “There is not a single country that has fallen into a so-called ‘debt trap’ as a result of borrowing from China.”

Well, surprise surprise fancy communist China saying that. The fact is many countries including  Djibouti, Laos, Zambia, and Kyrgyzstan have debts to China equivalent to at least 20% of their annual GDP. Corrupt governments from poorer parts of the world love the fact that China comes along and offers ridiculous amounts of money for infrastructure that they cannot really afford, but when these desperate and totally corrupt officials are bribed with millions of dollars then it is no surprise that these completely over the top infrastructure deals go ahead.

China is one of the world’s largest single creditor nations. Its loans to lower and middle-income countries have tripled over the past decade, reaching $170bn (£125bn) by the end of 2020. However, China’s overall lending commitments are likely to be significantly greater than these figures suggest. Research by AidData, an international development body at William & Mary University in the US, finds that half of China’s lending to developing countries is not reported in official debt statistics.

China tends to lend at higher rates of interest than western governments. At around 4%, these loans are close to commercial market rates and about four times that of a typical loan from the World Bank or an individual country such as France or Germany. The required repayment period for a Chinese loan is also generally shorter normally less than 10 years, compared to around 28 years for other lenders’ concessional loans to developing countries.

The communist regime also has a ‘default clause’ so when poorer countries default on their high-interest short re-payment period loans, there is a get-out clause that these impoverished countries can take and that usually means giving the brutal communist regime airports, docks, ports, and land to cover the debt. So as far as the Chinese Communist Party is concerned these debt traps are very good business.

For more information regarding this story simply click the link: https://www.bbc.com/news/59585507

Editor: Mr Cow / PR: Mini Cow


Edited by:【Himalaya London Club UK】

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