The undeclared debts of China-financed countries have grown significantly since the launch of the New Silk Road, China’s great interregional development project, and amount to at least $ 385 billion, according to a new study.
The analysis carried out by the AidData research center focused on data from 165 countries involved in foreign development financing by China since 2000 and revealed that debts that do not appear on governments’ balance sheets have seen an upward trend since the start of the big Chinese project in 2013.
“The weight of the debt is considerably higher than research institutions, risk rating agencies or intergovernmental organizations imagined, “the report noted.
Thus, 42 countries have levels of indebtedness with China greater than 10% de su PIB, including Laos, Maldives, Cambodia and Myanmar. In Laos, the China-Laos worth $ 5.9 billion is financed with an unofficial debt equivalent to a third of GDP from the country.
Debts are not systematically reported to international organizations such as the World Bank, because in many cases government institutions they are not the main borrowers responsible for reimbursement.
Almost the 70% of loans Chinese abroad target state companies and banks, special purpose partnerships, joint ventures and private sector entities in host countries.
“Most of them benefit from explicit or implicit forms of liability protection by the host government, which has blurred the distinction between public and private debt and created important financial management challenges public policy for developing countries, “concludes the report.
Currently the great Chinese project faces a rival represented by the initiative of the G7 countries, Build Back Better World, launched this year as an alternative to the New Silk Road.
In its AidData report, it analyzed 13,427 projects in 165 countries between 2000 and 2021 with a total funding of $ 843 billion.
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