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China is calling in loans to dozens of countries from Pakistan to Kenya

fortune.com

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Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#21

Post by coldtea »

wonderwonder wrote: post #19

Thats the thing I don't get about countries turning to China. America does things for itself but also does things just to advance democracy. China's only interest is China. If your choice is a semi-friendly loan shark or a smash your kneecaps loan shark, I have no idea why countries are choosing the latter.

>but also does things just to advance democracy

Or so it self-advetises.

"Advancing democracy" originated as an anti-communist theme, in the Cold war era fight for global influence, and after 1991 it turned into a hammer to yield against mostly Arab countries and others with resources and/or independent foreign policy.

This democracy advancing didn't have issues sponsoring and supporting dictatorships (say, Pinochet in the 70s and Saddam in the 80s to name but a few), or being best buddies with a family that owns a whole country non-democratically and are known for huge human rights abuses (buddies until recently at least).

In the last 20 years alone, it has turned 4 countries into much worse than they were.

Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#22

Post by bombcar »

coldtea wrote: post #21
wonderwonder wrote: post #19

Thats the thing I don't get about countries turning to China. America does things for itself but also does things just to advance democracy. China's only interest is China. If your choice is a semi-friendly loan shark or a smash your kneecaps loan shark, I have no idea why countries are choosing the latter.

> but also does things just to advance democracy Or so it self-advetises. "Advancing democracy" originated as an anti-communist theme, in the Cold war era fight for global influence, and after 1991 it turned into a hammer to yield against mostly Arab countries and others with resources and/or independent foreign policy. This democracy advancing didn't have issues sponsoring and supporting dictatorships (say, Pinochet…

Exactly. The democracy advanced always exactly matches the current US interests. Funny that. We’re just so damn perfect we never ever ever get anything wrong.

Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#23

Post by NovaDudely »

wonderwonder wrote: post #19

Thats the thing I don't get about countries turning to China. America does things for itself but also does things just to advance democracy. China's only interest is China. If your choice is a semi-friendly loan shark or a smash your kneecaps loan shark, I have no idea why countries are choosing the latter.

Maybe they provide a better initial deal? No idea.

But people can be blinded by better initial conditions even if long term it is worse.

Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#24

Post by nonethewiser »

missedthecue wrote: post #10

What a weird headline. China isn't "calling in" the loans. Nothing sudden is happening here. They are following their preset repayment schedule. The author is upset that China isn't willingly choosing to forgive billions in loans.

You hear the same language with fear mongering about foreign countries “calling in” US debt. These people must be terrified of their bank all of a sudden demanding the entirety of their remaining mortgage now.

Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#25

Post by nonethewiser »

coldtea wrote: post #20
missedthecue wrote: post #10

What a weird headline. China isn't "calling in" the loans. Nothing sudden is happening here. They are following their preset repayment schedule. The author is upset that China isn't willingly choosing to forgive billions in loans.

Meanwhile the IMF, used as tool by western capitalism, has drove countries to the ground, using its loans to pressure for all kind of unpopular ultra-neoliberal reforms that destabilized countries, driving people to extreme poverty, and shredding their social safety nets. Then there are the direct loans from those "forgiving" debtors (as per the article) which always come with all kinds of strings attached, political…

What kind of reforms? Like labor laws, worker protections?

Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#26

Post by rasz »

wonderwonder wrote: post #19

Thats the thing I don't get about countries turning to China. America does things for itself but also does things just to advance democracy. China's only interest is China. If your choice is a semi-friendly loan shark or a smash your kneecaps loan shark, I have no idea why countries are choosing the latter.

The answer is you pick the one doing whole red carpet royal treatment.

Gyude Moore: “China in Africa: An African Perspective” https://www.youtube.com/watch?v=P5uzxV8ub9k (Author has BS in Political Science from Berea College and an MS in Foreign Service from Georgetown University.)

Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#27

Post by bequanna »

George83728 wrote: post #11
missedthecue wrote: post #10

What a weird headline. China isn't "calling in" the loans. Nothing sudden is happening here. They are following their preset repayment schedule. The author is upset that China isn't willingly choosing to forgive billions in loans.

The important context is that these loans were given with the expectation that the recipient would eventually default. These loans are backed by resource rights, and would also giving China considerable leverage to demand the right to create ports / military bases, etc. Anybody paying attention has seen this coming miles away (example: https://doi.org/10.1016/j.resourpol.2018.04.014 ), but such loans are too tempting…

Sure, but wouldn’t China be relying on those countries willingly giving those things (ports, resources, etc) to them?

Why would any country do that?

Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#28

Post by SanjayMehta »

coldtea wrote: post #20
missedthecue wrote: post #10

What a weird headline. China isn't "calling in" the loans. Nothing sudden is happening here. They are following their preset repayment schedule. The author is upset that China isn't willingly choosing to forgive billions in loans.

Meanwhile the IMF, used as tool by western capitalism, has drove countries to the ground, using its loans to pressure for all kind of unpopular ultra-neoliberal reforms that destabilized countries, driving people to extreme poverty, and shredding their social safety nets. Then there are the direct loans from those "forgiving" debtors (as per the article) which always come with all kinds of strings attached, political…

The IMF has a history of releasing loans to clear interest payments on older loans.

They also force target countries to grow cash crops instead of wheat, for example. This forces the client country to become dependent on food imports, usually from the US.

Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#29

Post by nonethewiser »

ajross wrote: post #3

There's a weird frame to this article that seems to be painting China as a "loan shark" villain pressuring the poor debtor countries. But that's not the way loans work at this scale. If this debt is bad, it's bad, and pressure isn't going to get those RMB back. China is on the hook here, and that's extremely bad for China . At the end of the day Kenya or Zambia can just refuse to pay (it's not like their credit is gr…

This explains why the debt is bad for Pakistan, Kenya.

> In Pakistan, millions of textile workers have been laid off because the country has too much foreign debt and can’t afford to keep the electricity on and machines running.

> In Kenya, the government has held back paychecks to thousands of civil service workers to save cash to pay foreign loans. The president’s chief economic adviser tweeted last month, “Salaries or default? Take your pick.”

Furthermore, another bad thing for Kenya, Pakistan, etc. would be China repossessing. In fact some speculate thats really the end goal. China would love to operate all these ports themselves. Already happened in Sri Lanka. Unfortunately for the people in these countries the leaders can make a lot of money by signing off on bad loans and then they never have to face the consequences themselves.

Re: China is calling in loans to dozens of countries from Pakistan to Kenya

#30

Post by 49erfangoniners »

koolba wrote: post #5

> Behind the scenes is China’s reluctance to forgive debt and its extreme secrecy about how much money it has loaned and on what terms, which has kept other major lenders from stepping in to help. On top of that is the recent discovery that borrowers have been required to put cash in hidden escrow accounts that push China to the front of the line of creditors to be paid. This is the part of “belt and road” where they…

And then take your roads, which were collateral
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