China has handed out US$240 billion worth of bailout loans to 22 developing countries at risk of default over the past two decades, with the trend accelerating in the past few years, a report said yesterday.
Almost all the funds went to Belt and Road Initiative (BRI) countries such as Sri Lanka, Pakistan and Turkey — mostly low and middle-income nations that have received Chinese loans for infrastructure development, the study said.
The 40-page report by the US-based research lab AidData, the World Bank, the Harvard Kennedy School and the Kiel Institute for the World Economy showed that bailout loans had accelerated between 2016 and 2021, with Beijing doling out 80 percent of its rescue lending in that period.
Photo: Reuters
Around the world, BRI nations have come under strain as soaring inflation and interest rates, compounded by the lingering effects of the COVID-19 pandemic, have hurt their ability to repay debts.
The bailouts allow the countries to extend their loans and remain solvent, the report said.
China says that more than 150 countries have signed up to the BRI, a trillion-dollar global infrastructure push unveiled by President Xi Jinping (習近平) a decade ago.
Beijing says the initiative aims to deepen friendly trade relations with other nations, particularly in the developing world.
However, critics have long accused China of luring lower-income countries into debt traps by offering huge, unaffordable loans.
“China has developed a system of ‘Bailouts on the Belt and Road’ that helps recipient countries to avoid default, and continue servicing their BRI debts, at least in the short run,” the report said.
Compared with the IMF and the vast liquidity support extended by the US Federal Reserve, China’s bailouts remain small, but are growing quickly, the report said.
“Beijing has targeted a limited set of potential recipients, as almost all Chinese rescue loans have gone to low and middle-income BRI countries with significant debts outstanding to Chinese banks,” it said.
Chinese loans tend to be more opaque compared with other international lenders of last resort — and often come at an average interest rate of 5 percent, compared with a typical 2 percent rate on an IMF loan, the report said.
Many such agreements are so-called “rollovers,” in which the same short-term loans are repeatedly extended to refinance debts about to come due.
China this month agreed to restructure its loans to Sri Lanka, clearing the way for an IMF bailout of the nation.
Anna Bhobho, a 31-year-old housewife from rural Zimbabwe, was once a silent observer in her home, excluded from financial and family decisionmaking in the deeply patriarchal society. Today, she is a driver of change in her village, thanks to an electric tricycle she owns. In many parts of rural sub-Saharan Africa, women have long been excluded from mainstream economic activities such as operating public transportation. However, three-wheelers powered by green energy are reversing that trend, offering financial opportunities and a newfound sense of importance. “My husband now looks up to me to take care of a large chunk of expenses,
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
TECH CLUSTER: The US company’s new office is in the Shalun Smart Green Energy Science City, a new AI industry base and cybersecurity hub in southern Taiwan US chip designer Advanced Micro Devices Inc (AMD) yesterday launched an office in Tainan’s Gueiren District (歸仁), marking a significant milestone in the development of southern Taiwan’s artificial intelligence (AI) industry, the Tainan City Government said in a statement. AMD Taiwan general manager Vincent Chern (陳民皓) presided over the opening ceremony for the company’s new office at the Shalun Smart Green Energy Science City (沙崙智慧綠能科學城), a new AI industry base and cybersecurity hub in southern Taiwan. Facilities in the new office include an information processing center, and a research and development (R&D) center, the Tainan Economic Development Bureau said. The Ministry
State-run CPC Corp, Taiwan (CPC, 台灣中油) yesterday signed a letter of intent with Alaska Gasline Development Corp (AGDC), expressing an interest to buy liquefied natural gas (LNG) and invest in the latter’s Alaska LNG project, the Ministry of Economic Affairs said in a statement. Under the agreement, CPC is to participate in the project’s upstream gas investment to secure stable energy resources for Taiwan, the ministry said. The Alaska LNG project is jointly promoted by AGDC and major developer Glenfarne Group LLC, as Alaska plans to export up to 20 million tonnes of LNG annually from 2031. It involves constructing an 1,290km
RSS