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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

#61

Post by cced »

49erfangoniners wrote: post #32
bombcar wrote: post #22

Earlier quoted context omitted.

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.

OP compared the US to a loan shark, you're arguing against a strawman

You realise that institutions like the IMF and World Bank do exactly that? What exactly do you think happens to third world countries that can’t pay back IMF and World Bank loans? They get to walk off scott free? Here’s a hint: neoliberalisation gets introduced into the country and its assets get taken and privatized by western corporations.

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

#62

Post by jasmer »

George83728 wrote: post #59
jasmer wrote: post #36

Earlier quoted context omitted.

No, this is not true. The loans were not made by special investment banks but regular banks of China, if they are not repayed it will be havoc. They expect the loans to be repaid, and are definitely in trouble now that there are defaults. Also the terms were less generous than IMF etc..

"Regular banks of China" are all de facto organs of the CCP government. They play along with the strategic agenda or their executives get reeducated.

Yes, but the are making loans on regular commercial terms. So failure will be bad.

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

#63

Post by xref »

oneTbrain23 wrote: post #51
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…

[flagged]

Burner account making claims with no data, then being disproven immediately by other commenters providing data? Seems super legit.

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

#64

Post by alephnerd »

alephnerd wrote: post #46
rhaway84773 wrote: post #31

Earlier quoted context omitted.

This is a completely false narrative. The IMF is a lender of last resort. Countries only go to it to borrow when they absolutely need money and have nowhere else to go. And for obvious reasons, when countries are in such desperate straits that literally no private or public entity will lend money to them, the IMF requires fairly stringent rules so their leaders don’t just pocket the money and run away, or don’t spend…

This guy's right. The BRI is sort of like a hybrid merger of the World Bank and the Asian Development Bank (in reality controlled and managed by Japan) aimed at LDCs in Asia+Africa which Japan+SK wouldn't touch (either because it's not within Asia, or it's not financially viable). The same way the ADB would subcontract with Japanese corporations, you'd see BRI contract to Chinese corporations. That said, the ADB tend…

Added final paragraph:

This is why JP+SK's FDI has been aimed at more mature markets like India, Indonesia, PH, VN, TH, MY, MX, BR while Chinese FDI is aimed at Laos, Cambodia, Central Africa, Central America, South Asia.

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

#65

Post by selimthegrim »

nradov wrote: post #40
nonethewiser wrote: post #29

Earlier quoted context omitted.

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, “Salarie…

Perhaps Pakistan should cancel their nuclear weapons program and stop funding terrorists. That would probably free up some money to pay for electricity.

Saudis pay the bill for those. Power problems are more from overcapacity and high fixed capacity charges.

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

#66

Post by isitmadeofglass »

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.

[dead]

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

#67

Post by kevin_thibedeau »

lowdownfork wrote: post #54
oneTbrain23 wrote: post #51

Earlier quoted context omitted.

[flagged]

This article has no "hint claim" that China is the sole lender. In fact, there's no such thing as "the front of the line" when you're the sole lender. It's an article about Chinese lenders rejecting and sabotaging the traditional practice of lenders working together to avoid a default. They're trying to grab as much as they can for themselves while the debtor falls into chaos. You don't need to be the sole or even ma…

Their intent all along was to wait for the defaults to start pouring in so they can claim all the assets they funded. The speedrun way to plant infrastructure around the globe and manage their own banana republics without raising the hackles of an adversary. Making a deal was never an option.

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

#68

Post by flangola7 »

boeingUH60 wrote: post #38
rhaway84773 wrote: post #33

Earlier quoted context omitted.

Here’s a simple question. If the IMF loans are so terrible, why do countries apply for them? And if giving out loans to countries is such an awesome tool for the IMF, why is it refusing to allow Pakistan to draw down already approved loans?

The comment you're responding to is typical cope from corrupt, inept, and poorly-run countries looking for excuses on why they remain poor. I see this in my country (Nigeria) too...that somehow it's the IMF keeping us poor, not our stupid leaders and an equally stupid populace voting them in.

This you? https://news.ycombinator.com/item?id=35474481 I don't trust anything that comes out of your mouth.

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

#69

Post by neurostimulant »

bequanna wrote: post #27
George83728 wrote: post #11

Earlier quoted context omitted.

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?

If they don't, they can't get new loans anymore, which will doom the country. It's really hard to grow your economy without foreign reverses. Even North Korea, a hermit kingdom, works really hard to grow their foreign reserve.

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

#70

Post by neurostimulant »

cpursley wrote: post #13
ignormies wrote: post #6

Earlier quoted context omitted.

China's primary goal here isn't to make money -- it's political and economic leverage in emerging economies. https://en.wikipedia.org/wiki/Belt_and_Road_Initiative

The very purpose of political and economic leverage is to make money, even if not from those you are leveraging. Otherwise, what’s the point?

Money can't buy everything. But if you lend the money and the borrower can't pay it back, suddenly you can ask something that normally can't be bought directly with money.
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