FacebookTwitterGoogle+RedditEmail

Is China Springing Debt Traps or Throwing a Lifeline to Countries in Distress?

Tales spun by Western corporate media and politicians about China devastating economies in Global South by luring them into debt traps have increasingly worn thin and become threadbare. The latest episode to debunk such false narrative is China giving a fresh loan of $5 billion to Venezuela on President Maduro’s visit to Beijing last week.

The loan is a timely lifeline to Caracas, which has experienced hyperinflation over the last two years as a result of falling oil prices and America’s economic sanctions and sabotage against the Maduro government. Inflation rate in Venezuela smashed past 46,000% from January to April, with IMF forecasting an eye-popping 1 million % by year-end! The dire situation is similar to the hyperinflation in Zimbabwe in the first decade of the new millennium and Germany during the 5 years immediately following the end of the First World War.

According to press reports, the grace period for repayment for some of China’s $19 billion loans to Venezuela expired in April 2018. Instead of declaring loan defaults and demanding immediate repayment, as IMF and western banks are wont to do, China has agreed to lend another $5 billion to Venezuela.

China also helped its “Iron Brother” Pakistan last month by providing a  $2 billion loan to avert Islamabad’s balance of payment crisis. In 2016, Beijing came to the rescue of Egypt by lending $1 billion to its central bank and entering into a currency swap agreement worth $2.7 billion. This financial package enabled Cairo to obtain $12 billion loan in three tranches from IMF.

Half of China’s foreign aid goes to Africa.  China’s growing largesse to the Global South is fast catching up with America. With Trump taking a sharp knife to foreign aid, China is set to surpass the US as the largest donor by 2020. In addition, the Middle Kingdom has forgiven $3 billion debts owed by some African states over the past two decades. At the recent China-Africa Cooperation Forum in Beijing, President Xi Jinping announced that China would write off more soft loans extended to the most impoverished nations on the continent.

So, where are the debt traps sprung by China on unsuspecting developing countries in Africa, Latin America, Central Asia, South Asia and Southeast Asia? China is no Shakespearean Shylock, demanding to exact a pound of flesh on some hapless and helpless defaulters, or the Economic Hit Man from IMF.

More articles by:

Weekend Edition
December 07, 2018
Friday - Sunday
Steve Hendricks
What If We Just Buy Off Big Fossil Fuel? A Novel Plan to Mitigate the Climate Calamity
Jeffrey St. Clair
Cancer as Weapon: Poppy Bush’s Radioactive War on Iraq
Paul Street
The McCain and Bush Death Tours: Establishment Rituals in How to be a Proper Ruler
Jason Hirthler
Laws of the Jungle: The Free Market and the Continuity of Change
Ajamu Baraka
The Universal Declaration of Human Rights at 70: Time to De-Colonize Human Rights!
Andrew Levine
Thoughts on Strategy for a Left Opposition
Jennifer Matsui
Dead of Night Redux: A Zombie Rises, A Spook Falls
Rob Urie
Degrowth: Toward a Green Revolution
Binoy Kampmark
The Bomb that Did Not Detonate: Julian Assange, Manafort and The Guardian
Robert Hunziker
The Deathly Insect Dilemma
Robert Fisk
Spare Me the American Tears for the Murder of Jamal Khashoggi
Joseph Natoli
Tribal Justice
Ron Jacobs
Getting Pushed Off the Capitalist Cliff
Macdonald Stainsby
Unist’ot’en Camp is Under Threat in Northern Canada
Senator Tom Harkin
Questions for Vice-President Bush on Posada Carriles
W. T. Whitney
Two Years and Colombia’s Peace Agreement is in Shreds
Ron Jacobs
Getting Pushed Off the Capitalist Cliff
Ramzy Baroud
The Conspiracy Against Refugees
David Rosen
The Swamp Stinks: Trump & Washington’s Rot
Raouf Halaby
Wall-to-Wall Whitewashing
Daniel Falcone
Noam Chomsky Turns 90
Dean Baker
An Inverted Bond Yield Curve: Is a Recession Coming?
Nick Pemberton
The Case For Chuck Mertz (Not Noam Chomsky) as America’s Leading Intellectual
Ralph Nader
New Book about Ethics and Whistleblowing for Engineers Affects Us All!
Dan Kovalik
The Return of the Nicaraguan Contras, and the Rise of the Pro-Contra Left
Jeremy Kuzmarov
Exposing the Crimes of the CIAs Fair-Haired Boy, Paul Kagame, and the Rwandan Patriotic Front
Jasmine Aguilera
Lessons From South of the Border
Manuel García, Jr.
A Formula for U.S. Election Outcomes
Sam Pizzigati
Drug Company Execs Make Millions Misleading Cancer Patients. Here’s One Way to Stop Them
Kollibri terre Sonnenblume
Agriculture as Wrong Turn
James McEnteer
And That’s The Way It Is: Essential Journalism Books of 2018
Chris Gilbert
Biplav’s Communist Party of Nepal on the Move: Dispatch by a Far-Flung Bolivarian
Judith Deutsch
Siloed Thinking, Climate, and Disposable People: COP 24 and Our Discontent
Jill Richardson
Republicans Don’t Want Your Vote to Count
John Feffer
‘Get Me Outta Here’: Trump Turns the G20 into the G19
Domenica Ghanem
Is Bush’s Legacy Really Much Different Than Trump’s?
Peter Certo
Let Us Argue Over Dead Presidents
Christopher Brauchli
Concentration Camps From Here to China
ANIS SHIVANI
The Progress of Fascism Over the Last Twenty Years
Steve Klinger
A Requiem for Donald Trump
Al Ronzoni
New Deals, From FDR’s to the Greens’
Gerald Scorse
America’s Rigged Tax Collection System
Louis Proyect
Praying the Gay Away
Rev. Theodore H. Lockhart
A Homily: the Lord Has a Controversy With His People?
David Yearsley
Bush Obsequies
FacebookTwitterGoogle+RedditEmail