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China's Belt and Road Initiative leaves developing nations with $385 billion in 'hidden debts': Report

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China has invested in both public and private projects in about 70 countries and organisations since 2013 under Xi Jinping's BRI scheme. Once these countries declare their inability to pay back, China grabs their sovereign land for building military installations.

China's Belt and Road Initiative leaves developing nations with $385 billion in 'hidden debts': Report
China's Belt and Road Initiative (BRI) has left several lower- and middle-income nations with crushing 'hidden debts' (undisclosed liabilities), totalling $385 billion, according to a latest report.
AidData, an international development research lab based at Virginia’s College of William & Mary, came up with this figure after analysing 13,427 Chinese development projects, worth a combined $843 billion, across 165 countries over 18 years, ending 2017.
The report adds that China has invested in both public and private projects in about 70 countries and international organisations since 2013, when President Xi Jinping launched the BRI scheme.
The debts are 'hidden' as the World Bank or International Monetary Fund (IMF) aren't aware of them, thanks to the way the Chinese loans are structured. The financial liabilities linked to the loans provided under China's hallmark BRI scheme are intentionally under-reported to World Bank's Debtor Reporting System. Instead of lending to state institutions, China often extends loans to private companies in lower- and middle-income countries.
Among the debt-ridden nations, over 40 lower- and middle-income countries have to pay back more than 10 percent of their national gross domestic product to China, the report estimates.
Additionally, these BRI projects often encounter implementation issues. The report points out that 35 percent of the BRI infrastructure projects face "corruption scandals, labour violations, environmental hazards, and public protests."
The study comes at a time when global economic powers have expressed concern over China pushing smaller economies into so-called debt traps. Once these countries declare their inability to pay the huge debts, China grabs their sovereign land for building military installations.
Compared to the US and other major economies, China spends at least twice as much on international development finance. The country's per-year BRI investment has been pegged at $85 billion. These investments have "propelled China to global dominance in international development finance," says the report.
In fact, the number of infrastructure projects, financed with loans worth $500 million or more, tripled during the first five years of the BRI rollout.
To counter China's influence, the European Union recently rolled out Global Gateway, an infrastructure development scheme. The US too is planning to launch a similar scheme in South America.
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