Till now it was seen that China used to help poor countries by giving them loans, but now it will start a big campaign to collect loans by stopping the loan fair. Let us tell you that according to data released by an Australian think tank, this year China will collect its capital from 75 developing countries, including the world’s poorest and most sensitive countries. According to the data, these 75 countries have to repay a record 22 billion loan to Beijing this year.
According to a media report, in 2025, about 75 poor and sensitive countries will “pay records” of $ 22 billion to China. These loans were given between 2012 and 2018. The Australian think tank Lovi Institute reports that China, which was once a capital giving capital to developing countries, is now charging loans from them. In fact, in the 2010s under the BRI project of China, China gave wild loans wildly. According to the report, China is now facing pressure from its domestic commercial institutions to recover the outstanding loans. According to the report, a new type of “crisis period” has started for developing countries as the agents of the Chinese government have started putting pressure to recover the money. However, it remains to be seen how China’s image as a debt recovery country is affected as a development partner.
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Let us also tell you that this media report has been dismissed by the Chinese Foreign Ministry and said that some countries are being spread about the Chinese loan given to developing countries. Chinese Foreign Ministry spokesman Mao Ning said that China’s investment and financial support is in line with international standards, market principles and debt stability principles. He said that “Some countries are spreading rumors citing the threat of China, but do not state that multilateral institutions are the biggest lender of developing countries.”
Let us tell you that under the BRI, which is the major initiative of Chinese President Xi Jinping, China has given loans for billions of dollars projects in many developing countries. But these investments have been criticized as “debt trap”, especially when China leased Hambantota port of Sri Lanka for 99 years. Let us also tell you that after the Covid-19 epidemic, many countries failed to pay these loans due to the economic crisis and poor commercial possibilities of projects.
According to the report, in 54 out of 120 developing countries, loan payment to China has now exceeded the total payment made to the Paris Club (group of lenders from Western countries). The report revealed that China remains 7 of its 9 geopolitical countries, 7-Laos, Pakistan, Mongolia, Myanmar, Kazakhstan, Kyrgyzstan and Tajikistan’s largest bilateral lender. Let us also tell you that some countries, such as Honduras and Solomon Islands, received heavy loans from China after breaking diplomatic relations with Taiwan, and others such as Indonesia and Brazil, where China has enacted new loan agreements to supply important mineral resources – China’s debt flow continues in both these areas. In addition, China became the largest lender of Pakistan last year, which has a loan of about $ 29 billion. According to the World Bank, 22% of Pakistan’s total external debt is from China. Not only this, this year Pakistan has to pay and re -repay the external loans of $ 22 to 30 billion. Let us also tell you that in March this year, China has re -released a loan of $ 2 billion to Pakistan under CPEC.
However, there is no doubt that in 2025 developing countries will have to face a “debt tsunami” to repay China. Because now China is not playing a banker, but the role of a debt charge. A question here also arises whether China will use these loans for “geopolitical benefits”, especially when the US has cut foreign aid.
