Debt collector China stalks nations deep in poverty

China is rapidly becoming the world’s leading debt collector as the planet’s poorest nations struggle to repay a staggering US$22 billion in loans this year.

More than a decade after bankrolling cheap credit lines during the boom years of the Belt and Road Initiative, Beijing wants its money back, with interest.

“For the rest of this decade, China will be more debt collector than banker to the developing world,” Riley Duke, the author of a Lowy Institute report, warned this week.

The study by the Sydney-based think tank, entitled Peak Repayment: China’s Global Lending, makes grim reading for some of the world’s most poverty-stricken nations.

Since President Xi Jinping launched his signature foreign policy program in 2013, nearly $1.2 trillion in loans have been extended to around 150 Belt and Road countries across the globe.

At least half of those are now grappling “with a tidal wave of debt” repayments.

“As Beijing shifts into the role of debt collector, Western governments remain internally focused, with aid declining and multilateral support waning,” the Lowy report stated.

China is saving itself into poverty … [it is] a bleak picture.

China Business Spotlight

Behind the scenes:

• Stagnating development also risks fueling instability in nations involved in China’s New Silk Roads, a maze of multi-billion-dollar infrastructure projects.
• These are entwined with high-tech strands of intrusive surveillance technology, linked to big data banks containing a treasure trove of personal data.

Delve deeper: In 2021, the head of Britain’s Secret Intelligence Service, Sir Richard Moore, warned of the dangers of “debt and data traps” behind Beijing’s foreign policy goals.

Between the lines: “[China is] trying to use influence through its economic policies to [get] people on the hook,” the former MI6 agent said.

Bottom line: “If you allow another country to gain access to critical data, that will erode your sovereignty. You [will] no longer have control over that data,” he added.

Big picture: Four years later, Beijing has its own major problems with “the domestic economy at a dead end,” according to a report by China Business Spotlight this week.

What they said: “China is saving itself into poverty – a bleak picture reflected in falling spending, a weakening real estate sector, rising unemployment, and growing uncertainty.”

China Factor comment: Developing countries owe a total of $35 billion to China this year in Belt and Road debt repayments. Beijing will squeeze every last cent out of them.