From our correspondent
Beijing – Queen emergency loans. It is the new crown that China wore and secured $240 billion in subsidies to 22 countries since 2000. Chinese interference has intensified in recent years: between 2019 and 2021, it gave Beijing $104 billion Developing countries that are considered geopolitically important or known for their natural resources. Among these stand out Argentina, Venezuela, Turkey, Egypt, Belarus, Ukraine, Mongolia, Pakistan and Sri Lanka.
The data from this massive effort has been compiled and released today in the studio From the American Institute AidData in which the World Bank, the Harvard Kennedy School and the Keel Institute for the World Economy collaborated. Financial researchers revealed that China is about to catch up with the International Monetary Fund in terms of annual lendingIn 2021, it provided $40.5 billion in emergency funds to governments in difficulty, compared to $68 billion for the International Monetary Fund. While the IMF keeps its intervention stable, Beijing is accelerating its intervention.
Analysts point out that China has already replaced the United States as the “lender of last resort” for middle- and low-income countries that have reached the point of being unable to service their debts. Washington’s last major intervention dates back to 2002, when the US Treasury Department granted a $1.5 billion loan to Uruguay.to remember The New York Times. The US Federal Reserve provides short-term financing to industrialized countries that need liquidity for a few weeks.
“Beijing has created a new system of emergency loans, but it is acting opaquely and without coordinating with international institutions,” says Brad Parks, director of AidData. There are also doubts about the interest rates charged by China. While the IMF envisages rates of 2% on average (plus strict controls on the economic management of recipient countries), The study notes that the rate of China’s relief package is as high as 5%.
Many of the governments bailed out by the Chinese plan have received investments under the Belt and Road Initiative (BRI)The New Silk Roads project launched by Xi Jinping in 2013. BRI is the largest transnational infrastructure program in history. Xi Jinping, in Davos in 2017, called on globalized investors and industrialists to “ride the express train of China’s development.”. In 2017 and 2019, the Chinese government organized two forums on the Belt and Road Initiative in the Great Hall of the People in Beijing, which in Mandarin are called Yi Dai Yi Lu (Belt and Road). In Xi’s vision of the New Silk Roads, China should have invested more than $1,300 billion to build two thousand infrastructures spread across a hundred countries. Many mega-projects have proven unsustainable from an economic point of view, problematic in terms of environmental impact, and too expensive for governments that have accepted them with enthusiasm.. However, Xi still believes in his project as a global statesman and has announced that the third Belt and Road Forum will be held in Beijing this year.
According to the American Enterprise Institute think tank, $838 billion has been committed between 2013 and 2021 under the theme of the Belt and Road For infrastructure projects and other related initiatives. A mountain of money (and debt) that someone eventually has to pay off. “With hindsight, Beijing is solving the problems facing its banks, which is why it has embarked on the risky business of international loans,” he told the financial times Carmen Reinhart, Harvard Kennedy School Professor and former Chief Economist of the World Bank.
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