People in Greece and Italy, for example, see both the U.S. and China less favorably today than in 2021. "I think our conclusion is that they were being muscular and sophisticated in these contracts. They're very much protecting their interests.". A dozen of these countries owe debt of at least 20% of their nominal GDP to China (Djibouti, Tonga, Maldives, the Republic of the Congo, Kyrgyzstan, Cambodia, Niger, Laos, Zambia, Samoa, Vanuatu, and Mongolia). The area is also close to key shipping lanes and rich fishing grounds. Only 2.2% of workers between the ages of 15 and 59 have received formal vocational training, according to government figures. At the same time, however, there are no countries where more than half say U.S. influence is weakening, either. Such hype lacks a basic understanding of the law of population development, it said. Not too long ago China received foreign aid, but now the tables have turned. As the new preferred lender to low-income countries, China held 37 percent of these nations' debt in 2020. . And by comparison, the US is spending about $37bn in any given year to support global development activities," says Brad Parks. Read about our approach to external linking. And, third, forecasters of global economic activity who are unaware of surges and stops of Chinese lending miss an important swing factor influencing aggregate global demand. It argues that such confidentiality is common practice for international loan contracts. Africa's challenges, opportunities, and security interests are inseparable from our own," General Stephen Townsend, Commander of United States Africa Command recently said at a Senate Armed Services Committee hearing on March 15. In addition, China is not a member of the Paris Club (an informal group of creditor nations) or the OECD, both of which collect data on lending by official creditors. non-commercial websites. Chinese Foreign Ministry spokesman Wang Wenbin stressed that it was important "to look at not just the size, but also the quality of its population.". But even then, about 90% of the $100 billion (in todays dollars) spent in Europe comprised grants and aid. When the Communist Party of China first came to power in 1949, it was virtually completely unrecognized by pretty much every other country in the world most of whom favored the Republic of. Fears that China could launch an invasion of Taiwan have dominated headlines for months, fuelled by a series of incendiary interventions by senior officials in Beijing. But this does not comprehend the severity of the situation Africa finds itself. "China continues to gain strength while we are led by weaklings. It says: "There is not a single country that has fallen into [a] so-called 'debt trap' as a result of borrowing from China.". Every major world power has strategic interests in Africa but no western power has been able to have its way for long on this continent, that is why all the colonial powers abandoned it. Taken together, young people in a few countries including Australia, Belgium, Canada, Sweden and the United Kingdom are both more positive toward China and less positive toward the U.S. than older adults. A powerhouse in global trade, China has more shipping ports at. For instance, in Greece, 60% of those on the right have a favorable view of the U.S., compared with only 22% of those on the left. Eventually, if debtors are unable to service their debts, China takes over its collateral which is mostly in national assets. (+1) 202-419-4300 | Main leaving Sri Lanka saddled with growing debts. The state broadcaster CCTV said China, which the World Bank credits with lifting almost 800 million people out of poverty in the past 40 years, was being slandered despite creating a miracle of sustainable and stable economic development with a huge population.. The AidData researchers - who have spent four years tracing all of China's global lending and spending - say that Chinese government ministries are regularly going to them for information on how Chinese money is being used overseas. And 3) Forecasters of global economic activity are missing an important swing factor influencing aggregate global demand. To find out more, please review our Privacy and Cookies Policy. For individual content and infographics in your Corporate Design, What are 'debt traps' and what's the evidence for them? Assessing repayment burdens and financial risks requires detailed knowledge on all outstanding debt instruments. BRI projects were more likely to be associated with corruption, labour scandals or environmental issues than other Chinese development deals. In September, Radio Free Asia reported that residents of Myanmars northern Shan state had destroyed a fence built by Chinese authorities, claiming it encroaches on their countrys territory. Which topics are covered by the "Chart of the Day"? An analysis finds 50% of Chinas loans to developing countries go unreported. Bhutan has not responded to reports of the Chinese settlements along its border. This control threatens the ability of U.S. companies to access key supplies." wonders Anna Gelpern, a Georgetown law professor who was involved in an AidData study earlier this year examining Chinese development loan contracts. Between 2000 and 2017, other countries' debt owed to China soared ten-fold, from less than $500 billion to more than $5 trillion, according to the study from Germany-based think tank the Kiel . PM Modi took a dig at China by saying that the era of expansionism is over. It is often kept off government balance sheets, directed to state-owned companies and banks, joint ventures or private institutions, rather than directly from government to government. daily and featuring the latest statistics from the media, please visit our agency website, Your contact to the Infographics Newsroom, Find your information in our database containing over 20,000 reports. The country is accused of leveraging massive loans it holds over small states worldwide to snatch assets and increase its . VideoOn board the worlds last surviving turntable ferry, I didnt think make-up was made for black girls, Why there is serious money in kitchen fumes. Explore how China's claims over the South China Sea have antagonized competing countries and track the latest . Beijing alleges that it owns large parts of Laos on historical precedent dating back to the Yuan Dynasty, said The Print. Reports show that a substantial number of African countries have taken Chinese loans since 2000, totaling a whopping $124 billion by 2016 . Weve also documented a recent surge in the number of credit events on Chinese loans, which have not appeared in the reports of international credit rating agencies. This is not necessarily the case for Chinese lending, which gives rise to important questions of creditor seniority. However, China is North Koreas only remaining ally and never before has North Korea been such a threat. As of 2018, the PBoC has signed swap agreements with more than 40 central banks (ranging from Argentina to Ukraine), providing the right to exchange more than U.S. $550 billion of their own currencies for Chinese currency (the renminbi or RMB). In 2015, Chinese state media claimed that an attack on one of its remote checkpoints in Inner Mongolia was due to a provincial border dispute. At the time, experts said that if the dispute goes unresolved it could seriously damage relations between communities living along the two nations shared border. It's not the fault of today's corrupt African leaders or the African culture, but of things that happened before any of us were born. Until 1986, the total territory (or under control) of the PRC was 10.45 million km 2, including: [1] Continental mainland: ~9.60 million km 2. The Philippines: Another major maritime is between the Philippines and China. While views of the U.S. and China have remained mostly stable over the past year, attitudes in some countries have shifted. In about a third of the places surveyed, more educated people are also more likely to say that U.S. influence is getting weaker. Widely regarded as an economic miracle, China embraced widespread centralized economic reforms, averaging a GDP growth of 10% annually and lifting half of its 1.3 billion people out of poverty . Laos has a 313-mile border with China that runs from the tripoint with Myanmar in the west to the tripoint with Vietnam in the east. China's presence and activities in Africa are not new. But there are no cases, among the hundreds of loan arrangements studied by AidData and some other researchers, of Chinese state-owned lenders actually seizing a major asset in the event of a loan default. Western workers should stay out of Africa, its too dangerous. Increasingly, Chinese loans appear to require borrowers to promise hard cash earned from selling natural resources. China is alarmed by the Quad. China might soon face some international lending competition. Since 2013, Argentina, Mongolia, Pakistan, Russia and Turkey all have made use of their RMB swap lines in periods of market distress. Ramaphosa affirmed that he supports China's policies on Taiwan, Tibet, and other "major issues". Video, 00:02:36What is China's One Belt, One Road? The Paris Club used to hold the majority of low-income countries debt before it was restructured and largely forgiven after the turn of the millennium for qualifying, developing countries. A market in Chennai, India, on Wednesday. Between 2007 and 2020, China invested $23 billion in infrastructure projects in Africa, according to the Center for Global Development, a US think tank. "[That is] income for these very poor countries, dollars and euros, to lock those up in an offshore account that's controlled by a foreign power. How many World Bank loans or IMF loans have African nations defaulted on or better yet how many of these loans have been fully paid back without being refinanced by more WB or IMF loans? In the border region, an uneasy alliance persists, ABC News reported in 2019. A twisting railway running between China and the neighbouring country of Laos is often touted as a prime example of China's off-the-books lending. What they are doing is really doing the CCP's PR towards African as well as western publics. When it comes to views of the U.S., the pattern is more varied. proper attribution to Statista. But while many more continue to have confidence in Biden, positive views of his leadership have taken a downward turn in the past year, falling by double digits in nearly every country surveyed. They want to eat and they want infrastructure. Across most countries surveyed, more educated people are more likely to say Chinas power is growing. It points out that a large proportion of Sri Lanka's overall debt was owed to non-Chinese lenders, and that there's no evidence China has taken advantage of its position to gain strategic military advantage from the port. Because the West is NOT offering what these countries really need (same happens with Latin America btw). How does China's lending compare with others? In November, Chinese vessels blocked and used water cannons on two Philippine supply boats that were heading to a disputed shoal occupied by Filipino marines in the South China Sea, The Guardian reported. General Stephen Townsend, Commander of United States Africa Command, Senate Armed Services Committee, March 15, 2022. US-China Economic and Security Review Commission, 2020 annual report to Congress. BRI aims to build an economic and infrastructure network connecting China with Europe, Africa and beyond, and has already strengthened China's global influence from East Asia to Europe by making countries worldwide increasingly dependent on China. National Security Threat: Another Latin American Country Chooses China, China Winning Technological War: Biden Administration Allowing It, China Crosses "Red Line" Advancing Russia's War Effort. Contact: info@gatestoneinstitute.org According to the Financial Times, the country had to renegotiate loans worth $52 billion in 2020 and 2021 - more than three times the amount that met this fate in the two previous years. "It really seems like kind of a bread-and-butter strategy they use to signal to their borrower that 'We're the big boss around here'," Brad Parks explains. It's not sci-fi any more! The clashes were the first to result in fatalities in the border area in at least 45 years. While China has been increasing its annual Foreign Direct Investments (FDI) in Africa -- its FDI flows grew from just $75 million in 2003 to $4.2 billion in 2020 -- annual American FDI flows to Africa have been heading the other way. Maybe more importantly, our analysis reveals that 50% of Chinas loans to developing countries go unreported, meaning that these debt stocks do not appear in the gold standard data sources provided by the World Bank, the IMF, or credit-rating agencies. Most of the line is owned by the Chinese-dominated railway group, but under the murky terms of the deal, the Laotian government is ultimately responsible for the railway's debt. Chinese Communist Party officials have unveiled an "action plan for cooperation" with Latin American countries that amounts to a "comprehensive" plan to . China shares a contiguous border of 292 miles with Bhutan and territorial disputes have been a source of potential conflict. While China has offered to negotiate, Philippines has said these territories are non-negotiable and have always been part of their country. Starting in 2013, it leverages China's expertise in infrastructure projects, and ample foreign currency, to build new global trading routes. Analysis of the port project by UK-based think tank Chatham House has questioned whether the "debt trap" narrative strictly applies, given that the deal was driven by local political motivations, and that China never took formal ownership of the port. The Chinese embassy in Kathmandu denies any encroachment. The region has also previously been the site of violent tensions between minority ethnic Mongolians and Han Chinese. As we mentioned in our previous post, the US has offered a latest estimate of Russian troops killed in Ukraine. BUT it was visible to any intelligent human being since at least 15 years ago. And their analysis found that 50% of Chinas loans to developing countries go unreported, which distorts the views of the official and private sectors in three material ways: 1) Official surveillance work is hampered when parts of a countrys debt are unknown. The countries fought a bloody border war in 1962, ending in a ceasefire that established the Line of Actual Control, Newsweek added. 1615 L St. NW, Suite 800Washington, DC 20036USA China has become a big lender to poorer countries, and there's been criticism of its approach. Editorial: editor@gatestoneinstitute.org. China has never been able to project military power beyond the confines of the Yellow Sea and never will be able to. China once tried to check its population growth with the now defunct one-child policy. These Africans spoke German, knew Germany, but rather than thanking Germans for being a different culture, they still blamed the Germans. They're not welcome in China though. South Korea is the only place surveyed where younger people have more negative views of China and more positive views of the U.S. than their older counterparts. It has been suggested that Beijing has bought its silence over territorial issues, The Diplomat said, due to an influx of investment that coincided with the suppression of anything that might be deemed mildly critical of China. Instead, its four focus areas are climate, health and health security, digital technology, and gender equity and equality. No part of the Gatestone website or any of its contents may be reproduced, copied or modified, without the prior written consent of Gatestone Institute. Views of Xi, by comparison, have remained largely unchanged over the past year, though they continue to hover at or near historic lows in most places. China hands out at least twice as much development money as the US and other major powers, new evidence shows, with most of it coming in the form of risky high-interest loans from Chinese state banks. But it has over recent years improved ties with China to counterbalance its long-standing relationship with India, its giant neighbour to the south.. This chart shows global debt levels cause by direct loans from China (as percentage of GDP) in 2021. China is lending differently: instead of financing projects by granting or loaning money from one state to another, almost all the money it's handing out is in the form of state banking loans. Against this backdrop, much more work is needed to analyze the characteristics and potential impact of Chinas lending around the world. The details are given below: . From 2020 to 2021, trade between Africa and China reportedly increased by 35% -- from $187 billion to $254 billion. Please note that the code must be integrated into the HTML code (not only the text) for WordPress pages and other CMS sites. For example, if a nation indebted to China turns to the IMF, officials should be aware that any funds the IMF disburses may be used to pay another official creditor, China, rather than be used to blunt market strains. Russia and China both seek to convert soft and hard power investments into political influence, strategic access, and military advantage. The Hong Kong authorities have arrested more than 110 people in national security investigations over the past year, charging 64, including most of the city's best-known pro-democracy activists . For an optimal experience visit our site on another browser. Manila is facing a deadlock in a dispute it cannot resolve alone, the International Crisis Groupwarned. Most African nations do not act like western nations when it comes to repaying external debt. The Chinese Communist Party's Secret Projects in the US: What Is Going On? China continues to deepen its engagement in Africa on all levels. please include a backlink to the respective infographic URL. Pictured: Townsend (center) reviews an honor guard of the of the Djiboutian Armed Forces with Lt. Gen. Zakaria Cheikh Ibrahim, Djiboutian chief of staff, in Djibouti City on August 8, 2019. This systematic underreporting of Chinese loans has created a hidden debt problem meaning that debtor countries and international institutions alike have an incomplete picture on how much countries around the world owe to China and under which conditions. 2023 Gatestone Institute. Note: Here are the questions used in this report, along with their responses, as well as its methodology. China has faced criticism for its lending practices to poorer countries, accused of leaving them struggling to repay debts and therefore vulnerable to pressure from Beijing. AidData says China remains the financier of first resort for many low and middle income countries. As of 2021, China had officially lent around $180 billion to low and middle-income countries, up from just around $40 billion in 2010. Early in the Yuan dynasty, China invaded Japan twice, in 1274 and 1281. About 40 out of Africa's 54 countries participate in China's Belt and Road Initiative (BRI), the global infrastructure and economic development project that the Chinese Communist Party (CCP) launched in 2013. This gap in perceptions is largest in Australia, where more than three times as many say Chinas influence is growing than say the same about American influence (73% vs. 19%). The "New Silk Road" project, which finances the construction of port, rail and land infrastructure across the globe, has created much debt to China for participating countries. Since taking power in 2012, Chinese President Xi Jinping has helped cement China's position as a global superpower -- and pushed forward an aggressive foreign policy, making bolder moves in . "Our competitors clearly see Africa's rich potential. China Merchants, founded as a patriotic enterprise in 1872 to attract Chinese capital to take on Western shipping lines, manages 36 ports in 18 countries. But developing country loans are just one element of Chinas overseas lending activities. Need infographics, animated videos, presentations, data research or social media charts? Laos is one of the poorest countries in the region and couldn't afford even a fraction of the cost. Hopefully, China will continue to spend $ billions more in these regimes governments for investments that they will never be able to collect on. IE 11 is not supported. Finally, in 2017, Sri Lanka agreed to give state-owned China Merchants a controlling 70% stake in the port on a 99-year lease in return for further Chinese investment. It will be very near impossible for the US or others to catch up on that, especially with the planned B3W initiative, because that initiative is not focused on much-needed tangible investments. Over 418,000 People Newly . In 2000, trade between China and Africa had been at a mere $11 billion. China is now Africa's largest trade partner. on two sectors: "Media and Technology", updated Instead, its four focus areas are climate, health and health security, digital technology, and gender equity and equality. As early as the 1970s, countries began to claim islands and various . Its loans to lower and middle-income countries have tripled over the past decade, reaching $170bn (125bn) by the end of 2020. China's growing role in international finance has remained obscure, mostly due to a lack of data and transparency. In many countries, younger people tend to feel more positively about China than older people. However, international maritime law stipulates that a submerged rock outside of a nations territorial sea generally measured as 12 nautical miles cannot be claimed as territory by any nation. The decision followed a warning by Chinas ambassador to the US that the countries could descend into military conflict over the independence of the government in Taipei. Last month Voice of America reported that Beijing had begun construction of villages and settlements along its Himalayan borders. Pew Research Center does not take policy positions. VideoOn board the worlds last surviving turntable ferry, I didnt think make-up was made for black girls, Why there is serious money in kitchen fumes. has questioned whether the "debt trap" narrative strictly applies, It argues that such confidentiality is common practice, Serena Williams announces pregnancy at Met Gala, Shooting suspect was deported four times - US media, Met Gala 2023: Stars celebrate Karl Lagerfeld, New record as 4.56m Indians take flights in a day, Japan to ban upskirting in stronger sex crime laws, Palestinian hunger striker dies in Israel prison. 2023 BBC. News of the population ranking made headlines around the world. The articles printed here do not necessarily reflect the views of the Editors or of Gatestone Institute. In addition, many Chinese loans are backed by collateral, meaning that debt repayments are secured by revenues, such as those coming from commodity exports. Despite the vying population statistics, China is far more wealthy than India. New data this week said that China will soon no longer be the world's most populous country. . China does not publish records of its foreign loans, and the majority of its contracts contain non-disclosure clauses which prevent borrowers from revealing their contents. Islands and reefs: ~75,400 km 2. For some years, Beijing has been aggravating tensions by increasing the presence of China Coast Guard vessels in the contiguous zone of the Senkaku/Diaoyu Islands, The Diplomat said. Africans will continue to move westward and northward by the millions. 2) Private sectors will misprice debt contracts, such as sovereign bonds, if they fail to grasp the true scope of a governments debts a problem thats compounded by the collateral clauses in many Chinese official loans, meaning that China will get preferential treatment when it comes to repayments. Just this week China was accused of encroaching on Nepals territory along the two countries shared border. The authors . On board the worlds last surviving turntable ferry. One of Laos' few sources of profit, the proceeds of its potash mines, were used to back the massive loan. Why does this matter? The Week is part of Future plc, an international media group and leading digital publisher. The authors research, based on a comprehensive new data set, reveals that between 1949 and 2017, thestate and its subsidiaries lent about $1.5 trillion to more than 150 countries across the globe much of which has been hidden from public view. But a fear of war lingers due to North Koreas increasing nuclear capabilities. We also show that China tends to lend at market terms, meaning at interest rates that are close to those in private capital markets.
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