China hit by surge in Belt and Road bad loans, $78bn renegotiated or written off in past 3 years

[Finer]

China never tries to interfere Pakistan's foreign policies, and Pakistan's close friendship with US never hinders its relationship with China, so it's not an issue, you guys can go to US to borrow if the terms fit you better. simple as that.

China needs Pakistan for world world 3 and vice versa. That is why both Pakistan and China have better understanding with each other. Business wise, it is disaster waiting to happen.

If Pakistan gets the house back in order and become in equal footing with China, only then relationship between Pakistan and China can flourish in terms of economically development growth.

 

[A Voice of Reason]

correction: China is not building things to be friendly. The projects are being executed with Chinese companies, banks, materials and labor. They know exactly what they are doing. In fact they probably know a lot of these projects are going to fail.

Many people misunderstand the Chinese priorities in building infrastructure projects. If such projects are profitable directly or indirectly, or in the case of overseas projects have important geostrategic collateral if not repaid or they further China's influence in the region, well this is all great but not the measure of sucess and not, when it comes down to it, necessary.

The real priorities are to meet the twin
targets of employment (of Chinese citizens) and spending on infrastructure to raise GDP. Personal advancement by the managers and officials involved at all levels usually depends on meeting these or very similar quotas and goals. Employed citizens don't have time to go on long walks together and conspire against the CCP paradise. Building for the sake of building raises GDP - an almost unused railway for instance, still raises GDP by the amount spent to build it, because that's how GDP is measured, not by profitability.

 

[beijingwalker]

China needs Pakistan for world world 3 and vice versa.

I don't know what you Pakistanis think, here in China, no one seriously thinks we are going to fight wars.

 

[Finer]

I hope there will be no WW3.


Actually, China bloc vs Western bloc is the product of the West.

The West can't accept sharing the world with anyone, and live peacefully.

Yes, USA and China decoupling is real and in motion.

One day, it could end in WW3.


But if I'm Pakistan, I will focus on today to build the country.

I will use any opportunity to improve Pakistan economy, befriend with any country.

And to ensure the world is not falling to the USA hand nor China hand, multipolar world is the best.

WW3 is inevitable and that is why the sides are being chosen. For that reason alone, Pakistan and Russia burned with their old animosity and started afresh with each other purely for WW3 - not for economic reasons.

Pakistan economic growth may start after WW3 - not before. All the preparations are set on world war 3 so I doubt there is any room for economic growth at this moment.

If you see the signs of inflations with growing taxes and whatnot, that is usually signs of preparing for the wars but they tell you not. History is there to learn from it and why.

 

[beijingwalker]

Many people misunderstand the Chinese priorities in building infrastructure projects. If such projects are profitable directly or indirectly, or in the case of overseas projects have important geostrategic collateral if not repaid or they further China's influence in the region, well this is all great but not the measure of sucess and not when it comes down to it necessary.

The real priorities are to meet the twin
targets of employment (of Chinese citizens) and spending on infrastructure to raise GDP. Personal advancement by the managers and officials involved at all levels usually depends on meeting these or very similar quotad and goals. Employed citizens don't have time to go on long walks together and conspire against the CCP paradise. Building for the sake of building raises GDP - an almost unused railway for instance, still raises GDP by the amount spent to build it, because that's how GDP is measured, not by profitability.

Building infras vs printing dollars, which one is better?

 

[Finer]

I don't know what you Pakistanis think, here in China, no one seriously thinks we are going to fight wars.

Your own government seems to think so and he is not stupid to do so. It is inevitable. He is preparing for it and so do others.

 

[beijingwalker]

Your own government seems to think so and he is not stupid to do so. It is inevitable. He is preparing for it and so do others.

LOl, that what western media wants you to believe, come to China and find out what we Chinese people think.

 

[etylo]

China is not lending money out of good will. Only Saudi Arabia does and to the extent USA does in exchanges of services like Pakistan as nation did as part of war on terror to support USA.

China lends out impossible to pay loan back which is good as slavery in terms of economically speaking. Pakistan would be wise to step out of CPEC. It is not beneficial for Pakistan in the long run.

"Negating the misleading comments, Noor Ahmed, secretary of the Economic Affairs Division of Pakistan, told Xinhua that the country‘s total foreign debt is about $106 billion and Chinese loan accounts for a mere 10 to 11 per cent of the total foreign debt, whereas the remaining 89-90 per cent is from other sources IMF, Paris Club, and other western organisations."

“CPEC-related government loans have an interest rate of only 2 per cent and a repayment period of 20-25 years, and repayment of debt will begin in 2021. CPEC is not imposing any immediate burden with respect to loans repayment and energy sector outflows. All debt-related outflows will be outweighed by the resultant benefits of the investments to the Pakistan economy,” the statement read.

"Referring to China’s developmental project, the statement added that the infrastructure sector is being developed through interest-free or government concessional loans. Gwadar Port is a grant-based investment, which means the Government of Pakistan does not have to pay back the investment amount for the development of the port."

CPEC not a ‘debt-trap’ but a boon for Pakistan | Board Of Investment

invest.gov.pk

I agree, China should stop lending money to other countries, instead it should concentrate on building the underdeveloped regions of China, not foreign countries of the world.

 

[Menthol]

China never tries to interfere Pakistan's foreign policies, and Pakistan's close friendship with US never hinders its relationship with China, so it's not an issue, you guys can go to US to borrow if the terms suit you better. simple as that.

Yes, that is the problem with China foreign policy, to not get involved with the internal affair of other countries.

While USA is extremely busy operating their propaganda machine in other countries, and control their politics by working with local NGOs to dispose any leaders who oppose USA will.

And USA is not hesitating to invade and destroy any country who USA has lost control and then gives a massive sanction to bring the entire country back to the stone age.

Does it bad?

But humans are like cattle.

I do believe there are many Iranians who praise USA as God despite what USA did to them.

 

[beijingwalker]

Don't forget, big US companies like apple and tesla still have over half of their production capability in China, how can any real wars happen when the economies of China and the west are so inseparately intertwined. use your brain.

 

[Menthol]

Gawadar can never become economic hub unless Pakistan can afford to pay the loan back which is impossible with China's outrageous loan interests.

But Pakistan has to get its own house in order to make Gawadar port economically viable and free of debt without the help of China. Only then, there is hope of relationship between Pakistan and China in the future. Greediness cannot inspire confidence no matter how much you sugarcoat it.

Gwadar will depend on Pakistani hard work.

At least someone is trusting Pakistan able to do it.

But not me.

Maybe one day in the future, decades later.

 

[epebble]

“CPEC-related government loans have an interest rate of only 2 per cent and a repayment period of 20-25 years, and repayment of debt will begin in 2021.

If that is true, that is a bargain, and nobody has a right to complain. The present FED rate is 4%; so, 2% represents a 2% loss by China.

 

[Mav3rick]

China hit by surge in Belt and Road bad loans, $78bn renegotiated or written off in past 3 years

Apr 17, 2023 09:33 AM +05:30 IST

Bad loans worth over $78 billion have hit China's $1 trillion Belt and Road Initiative (BRI) infrastructure finance programme in the past three years.

China's scheme had turned it into the top bilateral creditor, but it seems to have now become a financial burden for Beijing and its largest banks.

Chinese institutions re-negotiated or wrote off about $78.5 billion in loans for infrastructure projects such as roads, railways, ports, and airports globally between 2020 and March 2021, says the research organisation, Rhodium Group.

Rhodium recorded $17 billion in re-negotiations and write-offs in 2017-2019, which is now surpassed as companies' re-negotiated debts worth over $70 billion.

The total scale of BRI lending over the past decade is not officially known. However, AidData's Brad Parks estimates it at around $1 trillion.

Beijing has provided significant "rescue loans" to over 150 countries participating in the BRI, to prevent large borrowers from experiencing sovereign defaults.

A recent study by AidData, World Bank, Harvard Kennedy School, and Kiel Institute for the World Economy has revealed that sovereign bailouts to developing countries amounted to $104 billion between 2019 and end of 2021. For the longer timeframe between 2000 and 2021, the total stands at $240 billion.

BRI borrower countries are facing insolvency due to global growth slowdown, rising interest rates, and high debt levels. China has been accused of blocking debt restructuring negotiations by western creditors of these struggling countries.

BRI re-negotiations and write-offs reduced in 2022 after a surge in 2020-2021 due to the pandemic. Experts, however, suggest that this doesn't imply any enhancement in China's loan book's inherent quality.

The signs were visible early on, as early as 2019, but back then, no one was able to factor in the pandemic and the economic crisis in the small economies, due to the Russia-Ukraine war.

China hit by surge in Belt and Road bad loans

Global finance scheme becomes millstone for Beijing as $78bn renegotiated or written off in past 3 years

www.ft.com

China does NOT write-off debt; and roll-over is the best thing that can happen to a creditor whose largest interest is to keep lending and earning interest!

 

[etylo]

If that is true, that is a bargain, and nobody has a right to complain. The present FED rate is 4%; so, 2% represents a 2% loss by China.

The info is from Pakistani gov.

 

[beijingwalker]

China does NOT write-off debt; and roll-over is the best thing that can happen to a creditor whose largest interest is to keep lending and earning interest!

STUPID CHINA

New Data on the “Debt Trap” Question – Rhodium Group

The Belt and Road Forum took place last week, in a context of mounting pushback against Beijing’s signature foreign policy initiative. Debt sustainability concerns are at the center of current criticism,…

rhg.com