By Financial Times
From the article:
Chinese officials have long talked up the “win-win” attributes of their engagement with other developing countries. China wins contracts, markets and access to raw commodities. Its partners win infrastructure and investment, and an ally that, unlike western countries, eschews obvious political conditionality in return for loans. The mutual benefits can indeed be great. A growing number of the recipients of Chinese credit are discovering, however, that the purported “win-win” formula also creates losers.
US officials now see a disturbing pattern in which Beijing has encouraged indebtedness in order to gain control of strategic assets when debtors default on repayments. Whether China is doing this deliberately or not — and Beijing strongly denies this — the effect in parts of Africa and Asia is as such.
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But there are also valid reasons for US concern. No doubt, Chinese financing is supporting growth in Africa and Asia. No doubt too it is increasing the risk of distress in vulnerable clients. A detailed recent study by the Centre for Global Development found this was the case in 23 of 68 countries with BRI funding, eight of which already have unsustainable levels of sovereign debt.
Read the full article here.