The situation in Sri Lanka, Chinese debt, Washington warned Dhaka

[bluesky]

Blaming who lends your money for your problems is the dumbest thing one can ever imagine. Do you know China used to be the biggest borrower in the world for over 3 decades, mainly from the west, did you ever hear China blaming the west for lending us money? Can you actually force to lend money to someone if they don't want? so dumb...

As I said before, China is not sincere in its approach to poor Asian and African countries. Don't you know that Chinese officials influence the govt decision makers to get a project done, feasible or not?

Be sincere in your approach instead of taking away sovereignty of a country's asset only because it is unable to repay the loan.

Unless a donor country is insincere, it makes the feasibility study of a foreign project before committing loan money to that country.

China is self-centered like its people traditionally are. For money, your people can do any heinous thing this is what history says. And your leaders are no different.

China needs big bashing internationally.

 

[beijingwalker]

As I said before, China is not sincere in its approach to poor Asian and African countries. Don't you know that Chinese officials influence the govt decision makers to get a project done, feasible or not?

Be sincere in your approach instead of taking away sovereignty of a country's asset only because it is unable to repay the loan.

Unless a donor country is insincere, it makes the feasibility study of a foreign project before committing loan money to that country.

China is self-centered like its people traditionally are. For money, your people can do any heinous thing this is what history says. And your leaders are no different.

China needs big bashing internationally.

Save your breath parrotting western lies, China never forced anyone to borrow from China, and so called debt trap is a lie spinned by the west, can not withstand any though indepth research

The Myth of the Chinese ‘Debt Trap’ in Africa​

Bloomberg

By Robin Fall
March. 18 2022

Beijing has built huge infrastructure projects all across the continent, making some Western powers uncomfortable. But all is not as it seems.

Over the past two decades, China has built large infrastructure projects in almost every country in Africa, making Western powers uncomfortable amid wider concerns about Beijing’s investments across the continent. However, a deeper look shows that accusations of so-called debt trap diplomacy turn out to be unfounded.

 

[beijingwalker]

DW: China: A loan shark or the good Samaritan?
Beijing has been accused of strong-arming poor countries through predatory lending as part of its Belt and Road Initiative. A new analysis seeks to debunk claims surrounding China's "debt-trap diplomacy."

May 5, 2019

Security hawks in the West, especially in the United States, look at China as a new imperial power that is creating vassal states through predatory loan practices.

Fueling their anxiety is China's colossal Belt and Road Initiative (BRI) — a gargantuan global infrastructure development project mostly backed by Beijing. By one estimate from mining company BHP, total spending on BRI-related projects could touch nearly $1.3 trillion (€1.16 trillion) in the decade to 2023 — more than seven times the investment made under the US Marshall Plan to rebuild European economies after World War II.

Some extol the Chinese project as a new Marshall Plan that could substantially reduce trade costs, improve connectivity and eventually help pull several countries out of poverty.

Others accuse China of bankrolling poor countries to boost its influence, even if it means extending loans for economically unviable projects. They cite Sri Lanka's Hambantota Port as a cautionary tale of the pitfalls of reliance on Chinese financing. China took control of the strategically important port in 2017 after Sri Lanka struggled to repay the Chinese loan.

Debunking 'debt-trap diplomacy'

But a new report by New York-based consultancy Rhodium Group challenges the claims surrounding China's "debt-trap diplomacy."

The authors of the report, who analyzed 40 cases of Chinese debt renegotiations with 24 countries, found that only the Sri Lankan case involved a confirmed asset seizure, while China's taking control of a piece of land in Tajikistan in 2011 may have been in exchange for debt forgiveness.

The analysis showed that China mostly deals gently with its delinquent borrowers. The country has renegotiated $50 billion of loans in the past decade with debt waivers and deferments the most common outcomes.

The renegotiated loans account for a significant portion of China's overseas lending. Academics at the China-Africa Research Initiative at Johns Hopkins University in the US have been tracking $143 billion worth of loans in Africa between 2000 and 2017, while researchers at Boston University have identified more than $140 billion in Chinese loans to Latin America and the Caribbean since 2005.

The report found that creditors had more leverage over China when they had access to alternative financing sources such as the International Monetary Fund or international capital markets.

Curious case of Africa

China hawks in the West have often expressed their uneasiness at the country's deepening economic and military ties with Africa. China surpassed US as the continent's largest trading partner in 2009.

John Bolton, the US national security adviser, said late last year China was making "strategic use of debt to hold states in Africa captive to Beijing's wishes and demands."

Yet, a closer examination of Chinese loans shows that signing up for the BRI has not translated into African countries receiving more loans from Beijing, Jordan Link, research manager at the China-Africa Research Initiative, told DW.

On the contrary, annual lending to Africa fell significantly following the BRI announcement in 2013 and has hovered around those levels ever since. The Chinese Eximbank, the largest source of Chinese lending to the continent, has significantly reduced its lending in the past five years.

"If [Chinese President] Xi Jinping is using the BRI to marshal a confluence of economic and strategic gains in Africa, increased Chinese loan totals have not been a key factor," Link said.

Risky affair

China lacked leverage in the case of resource-backed loans, the report showed.

The Asian economic powerhouse has struggled to collect its debt from Venezuela, the country's largest overseas creditor with over $60 billion worth of loans since 2007. Beijing was expecting to be paid in oil exports but Venezuela's political turmoil and a declining oil production has meant that it has only been receiving the interest on its loans.

Similarly, China struggled to get Ukraine to repay a loan, which was supposed to be repaid in the form of grain shipments. Beijing had to ultimately resort to international arbitration to resolve the dispute.

"The Ukraine case shows that despite China's size and growing international economic clout, its leverage in some of these cases remains quite limited, even in disputes with much smaller countries," the report said.

'Unsustainable' loans

But the concerns of the Western politicians are not completely unfounded.

"The sheer volume of debt renegotiations points to legitimate concerns about the sustainability of China's outbound lending," the report said, warning that the number of distressed countries could rise in the next few years given that many Chinese projects were launched from 2013 to 2016.

Chinese state-owned companies are preferred to develop the Chinese-financed projects — often without a transparent bidding process. This opacity creates opportunities for corruption and is seen as an incentive to inflate project costs. There are also concerns about the construction quality. Overpriced projects and a rising reliance on Chinese debt have made many developing countries wary of the ambitious project.

The study also found that debt waivers by China are sometimes followed by more, often bigger loans and are not aimed at reducing the delinquent borrower's indebtedness to China. Beijing wrote off $7 million of Botswana's debt last year only to allegedly offer as much as $1 billion in new infrastructure financing.

Gaining influence

The report said debt waivers were often conceded by Beijing without a formal renegotiation process, even when there were few signs that the borrower was facing financial distress.

This shows that the write-offs were probably meant to signal support to the borrowing countries, and improve bilateral relations, it said.

https://www.dw.com/en/china-a-loan-shark-or-the-good-samaritan/a-48671742

 

[beijingwalker]

China's 'debt-trap' diplomacy is little more than a fantasy
As the authors of the Rhodium study write, China’s leverage in debt renegotiations is often exaggerated, and many of the examples in their study involved an outcome in favour of the borrower, not the supposedly predatory Chinese lender. Indeed, the Center for Global Development tracked Chinese lending from 2000 to 2017 and found more than 80 instances of debt relief.
https://www.trtworld.com/opinion/china-s-debt-trap-diplomacy-is-little-more-than-a-fantasy-32418

 

[bluesky]

Over the past two decades, China has built large infrastructure projects in almost every country in Africa, making Western powers uncomfortable amid wider concerns about Beijing’s investments across the continent. However, a deeper look shows that accusations of so-called debt trap diplomacy turn out to be unfounded.

You must be thinking I am the most unworthy guy without the knowledge of the reality in Africa. It is same as it is in SL. Chinese companies are building infrastructure projects in many countries of Africa.

So, do you want to tell me it is all free? No. China will keep on buying minerals from those countries at a discount price and sell the finished goods to those same African countries.

Note one point. China cannot continue this operations without contests. Korea and Japan will build factories in BD, import minerals from Africa and process them in BD at a cost much lower than China because BD labor costs are much lower than China.

 

[beijingwalker]

If Chinese money is that bad, why all the country turn to China for borrowing?

China surpasses all other global lenders
Chinese state loans and trade credit to 150 nations crossed $1.5 trillion – surpassing state debts by the World Bank, the IMF, or all the total of OECD creditor governments

Headquarters of the People's Bank of China (PBOC), the central bank, is pictured in Beijing, China September 28, 2018/ Reuters

With a huge trade surplus over the last two decades, China has emerged as a significant net lender to the world, especially to governments and state owned entities – many of which are in the developing world.

The Chinese government's claim to rest of the world surpassed $5 trillion, which is around 6 percent of the global GDP.

This figure includes China's $1 trillion portfolio investment in US treasury instruments.

However, as the Chinese authorities do not report their aggregated figures, the scale in state lending was unknown to the world until the Harvard Business Review recently published a report.

A wide range of data collected from diversified sources over years suggest that the Chinese state and its subsidiaries have already given $1.5 trillion in loans and trade credits to 150 nations and their state-owned entities.

This has turned China into the world's largest official creditor, surpassing traditional and official lenders such as the World Bank, the International Monetary Fund (IMF), or all Organisation for Economic Co-operation and Development (OECD) creditor governments combined.

The Harvard Business Review based its report on analysis of multi-year data compiled from hundreds of primary and secondary sources, put together by academic institutions, think tanks, and government agencies – including historical information from the Central Intelligence Agency. This provided the first comprehensive picture of China's official overseas debt stocks and flows worldwide.

It includes nearly 2,000 loans and nearly 3,000 grants given out since the founding of the People's Republic of China in 1949 to 2017. Most Chinese loans have helped finance large-scale investments in infrastructure, energy and mining.

Maximum market terms in state lending

Researchers Sebastian Horn of the University of Munich, Carmen M Reinhart, international financial system professor at Harvard, and Christoph Trebesch, macroeconomics professor at Kiel Institute for the World Economy, outlined the nature of Chinese state lending as similar to capital market terms.

They observed that most of the loans and credits by Chinese state entities are near to those from capital markets in terms of interest rate, collaterals, and the tough conditions in case of defaults.

Other funding to governments by states and international organisations like Breton Woods are much more concessional and includes more grants and aid.

For example, after World War II, the US had given $100 billion in today's value to the war-ravaged Europe for economic reconstruction. But 90 percent of that was grants and aid and very little was in market terms.

Developing world's liability to China growing rapidly

Average liabilities of 50 developing nations to China have increased from 1 percent of their GDP in 2005, to 15 percent of their GDP in 2017. To a dozen of them, the debt level is at least 20 percent of their GDP.

Since 2011, two dozen developing countries have restructured their debts to China.

More importantly, the analysis reveals that 50 percent of China's loans to developing countries go unreported, meaning that these debt stocks do not appear in the "gold standard" data sources provided by the World Bank, the IMF or credit-rating agencies.

Unreported lending from China has grown to more than $200 billion as of 2016.

https://tbsnews.net/economy/china-surpasses-all-other-global-lenders-48781

You must be thinking I am the most unworthy guy without the knowledge of the reality in Africa. It is same as it is in SL. Chinese companies are building infrastructure projects in many countries of Africa.

So, do you want to tell me it is all free? No. China will keep on buying minerals from those countries at a discount price and sell the finished goods to those same African countries.

Note one point. China cannot continue this operations without contests. Korea and Japan will build factories in BD, import minerals from Africa and process them in BD at a cost much lower than China because BD labor costs are much lower than China.

China never tried to stem competition, competitions make us stronger and we welcome it.

Africans can take care of themselves, they don't need you and the west concerns, more alternatives are never a bad thing for anyone.

In Africa, Blinken learns there's no appetite for China bashing | Africanews

“Our engagement in Africa, with Africa, is not about China or any other third party,” the US Secretary of State said

www.africanews.com

Exclusive-Western companies are blind to Ugandan investments – President Museveni

By Elias Biryabarema and Karin Strohecker KYANKWANZI, Uganda (Reuters) - Chinese private investment in Uganda is growing while Westerners are losing appetite to put money to work in the country, President Yoweri Museveni told Reuters, pledging to s...

kfgo.com

Uganda leader says China-style diplomacy 'better than' the West's

Museveni sees 'double standard' in U.S. stances on Ukraine, Soviet missiles in Cuba

asia.nikkei.com

 

[bluesky]

If Chinese money is that bad, why all the country turn to China for borrowing?

Chinese money is very bad for BD. We all know what your influences with the Burmese generals have done in that country.

We are a neighbor of Burma and we should not get a border with a country that is heavily influenced by China.

 

[beijingwalker]

Chinese money is very bad for BD. We all know what your influences with the Burmese generals have done in that country.

We are a neighbor of Burma and we should not get a border with a country that is heavily influenced by China.

You can refuse the money, China never forces anyone to take the money, don't worry, a simple no is enough to stop them.

 

[mb444]

The return on infrastructure is not simply the recovery of investment costs. Investing in infrastructure can most most directly improve people's living standards and income levels. Every person and business can enjoy the convenience of roads, bridges, and networks that bring life, production, and resources. Without infrastructure, even if you have the best factories and technicians, you will not be able to keep them alive. Infrastructure is the "most basic" facility, the most preferred option. The most basic option for investment is to invest in education in terms of people and infrastructure in terms of materials.
Infrastructure [roads, bridges, ports, airports] accelerates the flow of people and materials and reduces the cost of movement, making industrial investment possible.
Infrastructure, the investment is huge and takes a long time to recover the cost of investment, and can greatly improve a country's national power, so developed countries have avoided or even suppressed developing countries from investing in infrastructure.
I wonder how the government and people of Bangladesh view infrastructure, is it the same perception as yours?
Now that Bangladesh's neighbors are promoting infrastructure, I hope that Bangladesh will also build a lot of future-oriented infrastructure as a way to be in a good position to compete.
Our government has also been building more infrastructure in the country, not only traditional roads, bridges, ports, airports, power plants, but also future-proof infrastructure such as networks, big data, computing nodes, etc. For example, where I am now, gigabit internet is already available to households, and I have 1000 megabit broadband for only $5 (25RMB). 1 gigabit is 1,000 megabits per second (Mbps) 1,000 Mbps


This video is about how a poor, landlocked, mountainous province made a leap in GDP because of the construction of infrastructure and network infrastructure.

The relationship between Sri Lanka, Bangladesh, Pakistan and China is geopolitically determined, and no matter which government comes to power, as long as the leadership of that government still has its own national interests in mind, it is unlikely to do anything to harm bilateral relations.

Those people or institutions or scholars who hype and repeat China's debt trap are essentially serving the Western media hegemony.

The leaders of the Chinese government, unless they are all fools, will not engage in any debt trap and do anything detrimental to bilateral relations with developing countries. Not to mention countries like Bangladesh, Sri Lanka, and Pakistan that share important strategic interests with China.

At this stage, the West, India, Japan and other countries that have fundamental conflicts of interest with China will use all their capabilities to suppress and provoke China and stifle its development before it has fully grown.

China's strategy to deal with this is simple: actively expand relations with developing countries to reduce pressure and maintain its momentum while being suppressed by the dominant Western powers. This is the context in which the Belt and Road agreement was proposed.

To put it bluntly, for China, the benefits of China's bilateral relationship with Bangladesh far outweigh the benefits that the debt trap will bring to China. IIf I can understand this as an ordinary Chinese, then the Chinese government people can see it even more clearly.

There are many views in BD.... Bluesky as far as I am concerned is an indian pretending to be BD.

Coming back to to your question overwhelmingly across political opinions BD welcomes chinese infastructure investment. They are critical and necessary.

BD fiscal stance has always been risk averse and it is on record in stating that it will seek to maintain longterm debt to GDP ratio at or below 45%. This has never been the case with srilanka or pakistan.

Chinese debt trap nonsense is propaganda. BD recognises it and it also recognises good fiscal policy.

BD wants chinese investment in infastructure but what it really seeks is chinese FDA, transfer of sunset industry to BD and more exports to china to balance the current trade imbalance.

There are many opportunities of synergy between BD and china and hope these opportunities are fully exploited by both parties.

 

[mmr]

Sucks for sri lanka. Was supposed to be a successful country in south asia.

Hopefully tourism will help in coming years with the forex problem.

 

[mb444]

Sucks for sri lanka. Was supposed to be a successful country in south asia.

Hopefully tourism will help in coming years with the forex problem.

Srilankas woes comes down to covid and collapse of tourism. Without the pandemic it would have been mostly fine.

 

[TOTUU]

BD wants chinese investment in infastructure but what it really seeks is chinese FDA, transfer of sunset industry to BD and more exports to china to balance the current trade imbalance.

There are many opportunities of synergy between BD and china and hope these opportunities are fully exploited by both parties.

China's goals and Bangladesh's are exactly complementary.
China now earns a lot of dollars (printed paper) through hard work, and the US on the one hand, through various policies/regulations, media, restricts China from using these dollars (buying, investing, lending, etc.). Buying goods, resources, companies, technology, or investing, lending, all are not allowed, all are demonized, restricted or banned, attacked and discredited, by the Western media and their governments.
To China, or to Russia, the dollars that our two countries trade for work and resources have become paper.
China has sought in recent years to expand imports from developing countries and suppress exports in order to balance our trade accounts and reduce dollar reserves.
This is why our country has held import expos that the world has never seen before, and why we have reduced tariffs on exports from developing countries to us in large numbers over the past few years, especially countries with which we share strategic interests, such as China's unilateral tariff reduction on Bangladeshi goods last year to increase imports from Bangladesh.


This is the official website of the Chinese government, which represents the attitude of our government.



China and Bangladesh: Brotherly relations through trade and commerce
（Copy part of it over and show it to everyone.）
Of them, China Import and Export Exhibition (Canton Fair), China International Import Expo (CIIE), China International Fair for Trade in Services (CIFTIS), China-ASEAN expo, China-South Asia expo, Euro-Asia Economic Forum and Trade Cooperation Expo, Inter-textile Shanghai Apparel Fabrics, and China Yangling Agricultural High-tech Fair are all key exhibitions that will undoubtedly be of great significance to developing economies like Bangladesh. It is expected that Bangladesh's participation in these forums would open vistas of business opportunities and further enhance bilateral relations and co-operation.

According to data, From January to July 2021, the overall import and export volume of China and Bangladesh was $13 billion, a rise of 58.9 percent year on year. Despite the fact that bilateral trade favors China heavily, Bangladesh has enormous potential that has yet to be realized. Dr. Ma Razzaque, head of Research and Policy Integration for Development (RAPID), conducted a research that shows Bangladesh can earn $25 billion if it can grab only a 1 percent share of China's imports.

It is mentionable that China imported goods worth $2.4 trillion in the 2019-20 fiscal year and Bangladesh's share was very insignificant (0.05 percent). In the next 10 years, China is expected to import a total of $22 trillion worth of goods. Hence, China's Expo platform will provide a great opportunity for Bangladesh to explore the vast Chinese market and expand exports to bridge the bilateral trade gap and increase revenue.

Bangladesh's major export items, ready-made garments and others including leather goods, jute and jute goods, agricultural products, frozen and live fish, pharmaceutical products, plastic, sports goods, handicrafts, and tea have strong competitive edge in the international market. But its limited exports destination (mainly the US and EU) might put Bangladesh in a more challenging position. Because, the US has suspended GSP for Bangladesh in June 2013 and India imposed anti-dumping duty on the export of Bangladeshi jute goods in January 2017 for a period of five years.

Also to note, there is no guarantee to get into the EU's GSP+ scheme on expiry of the EBA initiative after graduation from the LDC group in 2026. Amid such looming economic uncertainty, the good news is that China has provided duty-free access to 97% of Bangladeshi products (a total 8,256 products) from July 2020. The expos are important ways to learn about Chinese consumer preferences and to tap into the vast China market.

Participating these expos Bangladesh can display and popularize its flagship products and diversify its export destination globally as a large number of buyers, entrepreneurs and companies from Europe, America, Australia, Southeast Asia, Middle East, and Africa attend there. For example, the China-ASEAN Expo (CAEXPO) could give Bangladesh trilateral trade expansion opportunity to enter China and the ASEAN market which has a combined population of 2 billion and a GDP of $18.5 trillion.

Bangladesh's development-first strategy, population of 170 million people, low-cost and skilled labor market, appealing geo-strategic location as well as investment-friendly policies make it an ideal investment destination. Bangladesh needs to highlight the vast investment potential and create confidence in a large number of foreign investors.

It is noteworthy, Bangladesh is constructing high-quality infrastructure, such as power plants, bridges, highways, railways, and ports, in collaboration with China. The Bangabandhu Bangladesh-China Friendship Exhibition Center (BBCFEC) was recently opened in Dhaka, to host export and sourcing fairs throughout the year, aiming at reaching Bangladeshi products to new international markets.

In short, the expos offer a platform to understand Chinese market and China's development as well as to make new linkage with consumers, companies, experts and different technologies which could lead product specialization and value addition in order to adapt to the conditions in China, a market with 1.4 billion people and over 400 million middle-income people. In this regard, China can provide technical assistance in framing policy positions and export-development strategy to help Bangladeshi products reach the Chinese market.

Like Bangladesh, South Asian countries, can also use the expos to promote their brands, build new trade image and expand their business opportunities in China and the worldwide market. Along with economic and commercial gains, such platforms would forge stronger cultural cooperation which will further enhance the bilateral brotherly relations and promote partnership for common prosperity.

 

[bluesky]

Bangladesh's per capita foreign debt buildup hits $460

Bangladesh's per-capita foreign debt ballooned to USD460 or Tk 39,000 in the fiscal year 2021, up by over $67 from the figure a year before, according to central bank statistics. Such a buck in external debt derives from a rise in the total external debts of the country in the year under review --

thefinancialexpress.com.bd

The news report above says the total foreign debt of Bangladesh is already over $78 billion. It is about $460 per head. I do not personally think it is healthy.

Bangladesh National Debt 2022

countryeconomy.com

It is more unhealthy when again it is considered that the internal debt is about $108 billion. please read the news above. So, I ask people to tell how the country will pay back the loans. Printing the US dollars may be a good way.

So, instead of making BD govt understand the dire situation BD is in, the US govt may do a great job if it provides a few printing machines to Hasina Bibi and her Party cronies.

My dear @UKBengali, please send your rosy comments on the total loan of $186 billion so far. Add p;lease also the Rooppur power value. It is another $12 billion.

For guys like you, it is nothing and you are the guy who proposes to build a Bullet Train line at the cost of $16 billion.

BD is eating Ghee-Bhaat by borrowing money and you think it is progress. Now, come up with your loan-GDP relationship to prove me wrong.

 

[Bengal71]

You can refuse the money, China never forces anyone to take the money, don't worry, a simple no is enough to stop them.

@TOTUU
Don't worry about any fringe opinion. BD is a democracy and we have all sorts of opinions but the reality is we as a country know Chinese debt trap is just propaganda. We need those infrastructure investment and we will continue, China and BD are good friends anyway.

 

[beijingwalker]

China offers developing countries a viable alternative for funds, but it's up to those countries themselves to decide where they like to get funds, it's rather absurd to blame China for every woe in those countries, China is not responsible for their countries development planning and policy making. Before China went into the picture, developing countries can only get money from the west, didn't they have any woes and problems back then? or Only after China became a major global player and suddenly all the problems in those countries popped up?

China is not responsible to do the "advice" job for the money one borrows, it's not China's job. Western power did too much "advice" job on how the borrowers should use their money, in other words, too many strings attached, this is why more and more countries no long prefer western loans.