mandag 13. april 2020

Coronavirus chaos could strengthen China's debt hold on struggling nations

As the coronavirus pandemic causes global economic devastation, Chinacould take control of debt-struck nations’ assets at an accelerated rate, or it could boost its soft diplomacy by forgiving debt. The choice has been laid out by the authors of a Harvard report on a Chinese tactic dubbed “debtbook diplomacy”, and comes amid calls for G20 nations to endorse a year-long debt moratorium for the poorest countries.

State-owned Chinese companies and banks have become major international lenders, including through large scale infrastructure investments under Xi Jinping’s Belt and Road initiative. China watchers have previously warned about the “debtbook diplomacy” ploy, where developing nations are unable to service heavy loan repayments on Chinese infrastructure investments, forcing them to relinquish control of assets to China.