Some say Beijing lends money for infrastructure and development to pressure poor countries with debt. Not so.
The New York Times
Date: April 26, 2019
By Deborah Brautigam
WASHINGTON — Representatives from more than 150 countriesbegan to gather in Beijing
on Friday for a grand forum to celebrate China’s grand Belt and Road Initiative. Since its formal unveiling in 2013, B.R.I. — a vast, worldwide web of infrastructure-development projects mostly funded or sponsored by the Chinese government — has generated both tremendous enthusiasm and tremendous anxiety.
Some call the colossal program a new Marshall Plan, arguing that it could radically reduce the costs of international trade as well as underpin the economic transformation of poor countries.
Others accuse China of using B.R.I. as a way to flex its economic muscle for political gain on the sly. The whole effort is a cover for “debt-trap diplomacy,” goes one common criticism — or, to borrow from John R. Bolton, the United States national security adviser, China is making “strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.” (Some American Democrats seem to agree with him, at least about this.)
Yes, debt is on the rise in the developing world, and Chinese overseas lending is, for the first time, a part of the story. But a number of us academics who have studied China’s practices in detail have found scant evidence of a pattern indicating that Chinese banks, acting at the government’s behest, are deliberately over-lending or funding loss-making projects to secure strategic advantages for China. [FULL STORY]