After Doling Out Huge Loans, China Is Now Bailing Out Countries
New York TimesNov 25, 2022
Study: China Spent $240B Bailing Out 'Belt & Road' Countries
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Image copyright: File Photo [via Reuters]
The Facts
An international study published Tuesday claims that China spent $240B bailing out 22 developing countries between 2008 and 2021, with the figure rising in recent years as they have struggled to repay loans spent building 'Belt & Road' infrastructure.
The paper written by researchers from the World Bank, AidData at William & Mary, Harvard Kennedy School, and the Kiel Institute for the World Economy shows that almost half of these bailout loans, or $104B, were granted between 2019 and the end of 2021.
The Spin
Anti-China narrative
The PRC has been using developing nations as pawns in its bid for influence against the US, exploiting poor countries under the guise of helping them. Currently the world's largest government creditor to such nations, Beijing now accounts for nearly half of these loans, which often come at high-interest rates. As the bill is coming due, China once again reveals its greed and the predatory nature of its so-called financial cooperation.
Pro-China narrative
The West has been spreading ill-founded narratives about China's alleged “debt trap diplomacy" for years — a myth that has three blatant problems: China doesn't unilaterally dictate the BRI projects to other countries, its development financing is largely recipient-driven through bilateral interactions and deals, and it has never seized an asset because a country defaulted on a loan. The real debt trap has been carried out by the IMF and World Bank.
