, China remains the first source of funding for many low- and middle-income countries.
“On average, China’s commitment to international development funding is about $ 85 billion, while the United States spends about $ 37 billion a particular year to support global development efforts.” My name is Brad Parks.
China outperforms all other countries in terms of funding, but the way Beijing has reached that level is “extraordinary,” says Aid Data.
Map the total value of China’s infrastructure projects in different countries of the world. Empty offer
In the past, Western countries were particularly guilty of debt, especially in African countries. Borrowing in China is different. Instead of funding a project by funding or lending from one state to another, almost all the money China spends is in the form of state bank loans.
These loans do not appear in the official account of government debt. This is because many of the transactions conducted by Chinese state banks do not mention the central government agency, so the central government agency excludes the transaction from the state balance sheet and knows exactly what the government has agreed to in a closed room. Hide them through confidentiality clauses that may prevent you from doing so.
AidData recorded an unprecedented $ 385 billion in debt. Many Chinese government development loans also require unusual forms of collateral. Chinese loans seem to be increasingly demanding that borrowers promise cash from selling natural resources.
For example, an agreement with Venezuela requires Venezuelan borrowers to sell oil directly to a bank account managed by China and deposit foreign currency. If the debt is not paid, the Chinese borrower can immediately withdraw cash from the account.
“It looks like some kind of basic strategy they’re using to show borrowers that we’re the big bosses here,” explains Brad Parks. “His message is that we were the only ones to ask for this precious possession, so you intend to pay us before anyone else.”
“(It) is the income of these very poor countries, dollars and euros, including foreign accounts managed by foreign powers.”
“Is China Smart?” Anna Gelpern, a law professor at Georgetown, who participated in AidData’s study of development loan contracts in China earlier this year, is wondering. “I think our conclusion is that they were muscular and sophisticated in these contracts. They greatly protect their interests.”