$385bn of China's Belt and Road lending kept undisclosed: report
Beijing's loans to Pakistan cost 3.76% interest, while Western peers offer 1.1%
ADNAN AAMIR, Contributing writer
September 29, 2021 14:16 JSTUpdated on September 29, 2021 20:22 JST
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A staggering $385 billion of Chinese debt to other countries has been hidden from the World Bank and IMF thanks to the way the loans are structured, U.S.-based AidData said on Wednesday in its latest version of the Global Chinese Official Finance Dataset. The report also alleges that a major portion of Chinese development financing in Pakistan is composed of expensive loans.
The AidData report claims Beijing has made its overseas development finance nontransparent. It says that China systematically underreports its debt to the World Bank's Debtor Reporting System by lending money to private companies in lower middle income countries by using special purpose vehicles (SPVs), rather than to state institutions.
This makes it difficult for debtors and multilateral lenders to assess the costs and benefits of participating in the Belt and Road Initiative. It also heightens the possibility of debtors falling into debt traps with only one way to climb out: by selling geopolitically important assets to China.
The report further says that due to debt spending by China under the banner of the Belt and Road Initiative, 42 countries now have levels of public debt exposure to China in excess of 10% of GDP. For instance, the China Exim Bank-financed China-Laos railway project, valued at $5.9 billion -- equivalent to roughly one-third of Laos' GDP -- is funded exclusively with hidden debt.
Bradley C. Parks, executive director of AidData at the College of William and Mary, said the World Bank and the IMF are already aware of this problem. He told Nikkei Asia that this new report has quantified the scale of the problem.
"We estimate that an average government is underreporting its actual and potential repayment obligations to China by an amount that is equivalent to 5.8% of its GDP, based on individual underreporting estimates for 165 countries," said Parks, who is also one of the co-authors of the report.
The report also makes some interesting revelat
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hello!
I currently live in France and I'll soon be signing a work contract that is "indeterminé" meaning there is no definitive end. I moved here to do my masters because I found a program that was $350.00 a year (yes that is the normal price for higher education here). I did have to learn a certain level of French, and I am still not fluent after 3 years, but getting MUCH better.
It's been an uphill battle and definitely not easy to be here, but now that I've graduated with my masters, rent my own apartment in Paris, and about to renew my visa, I am finally feeling like life is stable.. But, now the forebarance on my student loans is coming to an end. And for my undergraduate + study abroad (4 months = 25k, what was I thinking?!), my debts total over 68k.
I reached out to a financial adviser in the US and looked online for some repayment solutions. But in France, the salaries aren't very high -- the taxes are a lot and you get a lot of social benefits (health care, retirement, unemployment if necessary) so it evens out.
So that means if I were to pay what they were asking for my American student loans.. well I wouldn't be able to eat, feed my cat, or pay to wash my clothes at the laundrymat.
So I'm thinking.. maybe the best option is to kind of not super-duper pay my students loans back..I am researching online and if I don't plan of moving and living permanently in the US, then there's nothing they can really do, right?
I think I'll consolidate the 9 loans into one and then consistently pay an amount I can afford so that I never actually default (like 25euros a month) for 10 years and then save my money and try to settle the debt. Is that a thing, settling debt?
I'll keep researching, but I am not going to throw my money away so I can barely save in the country I've already starting investing my future in. If I work to become a french citizen then I'll have my social benefits for retirement, so it won't matter that my social security is taken. Also I can still visit the US any time, right?
Any other advice?Any major risks I am missing?.. any one that made this decision and then regretted it?...
EDIT : follow up question, does anyone know how this could impact co-signers?
Introduced: Sponsor: Rep. Bill Huizenga [R-MI2]
This bill was referred to the House Committee on Financial Services which will consider it before sending it to the House floor for consideration.
Rep. Bill Huizenga [R-MI2] is a member of the committee.
Hi all,
I’m a layman studying economics, here, and I’m currently reading Piketty’s Capital (which is where I pulled the quote from; c. pg. 131). Considering I don’t know too much about economics, I’m wondering how it was that inflation paid off WWII era debts — or if he’s exaggerating slightly, or what.
Any help breaking down his comment would be helpful!
Thanks!
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I’ve always found it frustrating that most democratic governments work by electing officials who represent portions of the population as they often vote for laws and make decisions based on which party they align with instead of what their constituents actually would prefer.
Has there ever been a society that actually put everything that passes through the government to a vote? Like maybe they still elect people to take care of the administrative stuff but they could also reach out to their constituents and get votes for each thing?
