Does China Debt-Trap Countries? | The Hindu 

If someone tells you that Sri Lanka is a victim of China’s debt trap, don’t let them fool you. Here are the key facts to consider when analysing the current debt crisis in Sri Lanka, and for that matter, similar events in the developing countries. Q1 - Is China the biggest lender to Sri Lanka. Answer - no, 47% of its foreign debts are in form of Eurobonds and many of these are Western Institutional Investors such as UBS, JP Morgan, Blackrock, etc. Outside of this category, ADB is the single largest lender at 13%, followed by China and Japan, each at 10% apiece, and then World Bank at 9%. In other words, saying China is exploiting Sri Lanka through ‘debt trap’ is completely false, or misleading at best. Q2 - Is China causing the debt crisis in Sri Lanka or is it helping to address such debt crisis. Perhaps we can use the Hambantota Port to illustrate this as it is often cited as the exemplary debt trap case or China involved in predatory lending. Sri Lanka’s bloating foreign debt problem already appeared in the 2010s. In 2017, China (through Export & Import Bank of China, China Development Bank) was called in to refinance its previous debts to Sri Lanka as well as facilitate the latter in servicing other foreign debt payments. A JV between Sri Lanka’s state-owned Port Authority and China Merchant Bank was formed in 2017 to run the said 99-year lease of Hambantota Port requiring China’s side to provide new USD900 million funds. Without which (ie the emergency funding), the country would have faced serious debt distress. In other words, this port-lease / emergency fund was not causing the country’s debt issue, but rather alleviating it. Q3 - When these developing countries can’t keep up the debt payments, what would China normally do? As a matter of fact, China has assisted these countries by debt cancellation and debt restructuring (including reliefs such as extending maturity, interest rate reductions, refinancing, and extensions). Beneficiary countries include African countries as well as countries covered by the Belt and Road Initiative (see D. Brautigam’s clip for details). Q4 - Where did the borrowed money go? Let's again use the Sri Lanka case. The foreign debt is being spent on infrastructures - in this case, Hambantota Port. As with all infrastructure investments, such spending enhances the future productivity and living standards of its nationals. Meantime, such spending also aids domestic employment. Most importantly, the money trails can be easily tracked and traced (for instance, railways or power plants). On the contrary, funds provided by the Eurobond Market have been mostly applied to cover the country's trade deficit and to meet fiscal deficits. In some developing countries where corruptions are prevalent, some of these funds may be misappropriated, ending in the pockets of its political leaders and oligarchs. Q5 - What is the impact of rising international interest rates on Sri Lanka’s foreign debt? Interest rates hiking means that the refinancing costs of Sri Lanka's foreign debts will be on the rise, making its dire financial situation even worse. In conclusion, the debt trap is not caused by China, but rather by western lenders. They are making it worse for Sri Lanka as these Western Countries are raising interest rates, making it more difficult for the country to service its interest payments and refinance maturing debts. Deborah Brautigam, a well-known scholar, has covered China ’s ‘debt trap’ myth extensively. She specifically addressed the Sri Lanka case in her clip (see the 15:20 mark onward). ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-q5SvFjlu9ZM.html

Debt problem in Sri Lanka is repayment of Western loans. How can Chinese "debt trap" be responsible ?

Being able to borrow is always a good thing. People seem to think that borrowing money is easy, it is very hard. Try to go to a bank and try if you can get a loan. They will only lend you if they are very sure they can get their money back. It is the same thing with nations, it is very hard to get a loan. With the IMF and World bank, they make the borrowing nations jump through hoops, make economic and political concessions before they are approved a loan. Sometimes the countries even after submitting to all these impositions by IMF still don't get the loan. You people seem to think that it is the lending institution/nation who goes to the borrower nation and begs the latter to borrow from them. China gets all this mudslinging and badmouthing only because the west feels threatened of their hegemony. They want to bring China down to preserve their superiority. And those who believes the US is very gullible and is being used by them.

I know it’s fun to debunk popular theories but this was not very well researched and a very narrow view of the issue. The projects china undertakes is more than just economic and whether its losing money on it is not the issue. The issue is the overall result of it. China preys on vulnerable countries and banks on them not returning the money so that they can dictate the rest of the terms and gain more inroads. Moreover the loans are used to award projects chinese companies only.

This is an extremely biased reporting by the hindu. I'm pasting an article from Harvard business review 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). Maybe more importantly, our analysis reveals that 50% of China’s 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

The hindu : newspaper which prints 2 page Chinese ads in disguise of news ....

As usual.. Objective and Factual analysis by The Hindu. Hoping for more videos like this which debunk popular myths like this.

To some indians who are calling Chinese to trap countries into debt , trust me as a Pakistani I can assure you that You have not come across IMF. They colonialist have upgraded their game and are occupying countries on economic front.ie.we have now accepted the demand of basically handing over of State bank of Pak. Other thing is Saudi gave us loan on 3.2% interest rate while China asked 1.8%

Reported for spam and misleading.

Absolutely bad hypothesis! Terrible.

It must be matter of investigation that how much money funded by China for this report.

Chinese debt trap can shows countries how borrowing money for loans may come at a cost.

This is a superficial analysis, to say the least. The fact remains that economic policies are not made in isolation. I was surprised at how the narrator called as 18% of loans to Zambia as "just" 18% without recognizing how huge that amount is for being concentrated in one country, plus ignoring the interest percentage China charges, which is insane and reminiscent of East India Company. You should read the history of East India Company and VOC to see how closely China is copying from these old timers.

When did Hindu became advocate of china ? And that apparently makes them opponent of India?

Hey a new form of video! Loved it!

Coming from a channel called literally "The Hindu" I will take this information with a grain of salt.

Thank you for your honest analysis! Love India, love China - from Russia! :)

Who are the other countries that have also debt trap diplomacy?

There are many videos produced by Africans supporting this video's claim.

If this is the standard of research, then it is better for me not to revisit it again.

Use right map of China.Aksai Chin is part of India.

If you borrow some money from bank 🏦 and after you refused to pay. In this condition what action should be taken by government against U!

Are you sure the external debts by IMF and the WB are less than the Chinese ones?

Sri Lanka's foreign debt is $51 billion. 10% owed to China, 10% owed to Japan, 9% owed to IMF, 47% owed to global market financial institutions. So why only China is a debt trap? Not Japan, IMF, Global banks? I always thought that Indians are good at math.

This is a good run down on the subject but the music seriously gets in the way of listening

The hindu, the only paper which propagates the Chinese propaganda in india when the country was facing the Galvan crisis.Dont try to come up with such superficial analysis as far as china is involved dear.

Foreclosure is a standard banking practice everywhere in the West. Why anybody expects China to be any different? If you are in the business of China bashing find out a more credible reason.

Ohh my god this is balatantly bias,, u communist darling,, don’t loose ur standard hindu

Please confess it. You copied the concept from Bloomberg, isn't it?

Hambantota , Dijuboti , Pakistan , Tajikistan ,etc are an example of asset seize ,, whe THE Hindu not covered ,

You should rename urself 'The Chinese' from 'The Hindus'.

LEFT IDEOLOGIES AT PLAY: debunking debt-trap theory in 4:28 min video 😄 Such a poor video. Poor research. Look, it's not the percentage of debt by China but rather how it's dealing with the projects it has lended money for. You have seen various instances of China influencing the policies of Srilanka and Pakistan against India. For example, the port taken away from India, in Sri Lanka.. and many more. China is encircling India by debt trapping its neighbors. Please bring in all these factors before making a video on topic like this. Your research just shows two figures - 10% and 18% . Please get serious. If you had gone deep then the video wouldn't have been this short. Tell your left leaning bosses at The Hindu that it's enough to potray our ideology on our newspaper and let's not go beyond. This is one of the poorest video by the Hindu.. Debunking debt trap theory in a 4:28 min video 😄

INTERNATIONAL Sri Lanka Crisis: India Top Lender To Sri Lanka In 2022, Says Think Tank Report India has provided a total of $4 billion in credit to Sri Lanka through its worst-ever financial crisis in 2022 to purchase essentials like fuel and medicines.

Great piece of News. Thanks for your unbiased reporting. Ps: You should ignore the negative comments.

Like they do in ph

Have you any doubt about that The Hindu??

Chinese mouthpiece in India

Paid video

Answer is "YES"

The debt has conditions and gives the Chinese government power in other countries politics and in the case of hambanthota is a deep water port with a strategic advantage against India ! advantage!

This is improved video editing of the hindu

Hah, finally a video in tune with a worldview in the strategic community... I am sure everybody is in some way triggered... it is easy to paint someone as a villain... media and political machinery do it and we fall for it... While India needs to be cautious about raising Chinese influence because of the loans, it shouldn't treat the strategic goals of China to be against India or any other nation

Great Graphics 🔥 and Presentation Nicely explained

Video FUNDED by CHINA, 100% sure, earlier The Hindu has published Chinese advertisement in their editorial.

Nicely explained. Thanks.

An eye opener outstanding information.....

My humbly request is to the Hindu that don't spread the message in which you have lack of evidence .first, you should analysis the whole country which has taken the loan from china and after that see what the problem the country envisaged. How could you define any one on the basis their upper face?

Abhi samajh aa rha the hindu ko? Aaur bhi bhi question mark 🤣🤣

Dude. !!! Hindu is biased :( trying to stir up controversy by playing devil's advocate ....

Ccp has ways of covering /contracting debt that's not disclosed, 10% may not be the actual number.

again we all know what you are going to say 😅

Which map is used to show china dead trap policy

TheHindu is good newspaper for analysis (ads are annoying though despite paying high price for paper) but Most of TheHindu video shots on YT are baseless. Just report this video

Yo, Solomon Islands, are you paying attention????

No creditor is going to loan money if he thinks there is no return on the project or money. If China is willing to loan money on losing projects, then the question becomes why. Maybe they don’t know, which is unlikely. Or maybe China knows that the country won’t be able to pay back. Therefore, it’s a trap to seize their assets. That is the point usually people are making. You did not address this point at all. Remember even IMF is not willing to give loan to these trouble loans, but then China is willing to take these risks.

Lol...people foing into subjective instead of 1st looking at the objective

Who’s here after China just forgave debt in 17 african countries

I don't know why I subscribed to this channel for news with such bad standard 🤦

A piece of constructive criticism for The Hindu team.. Please increase the volume of the vocals. The music is quite distracting and so we're missing out on important information!

Please study the subject properly before making any video

God 神座習座兩座移動 ㅡgod first world and second xi jinping ok

Yes it does

Theory made by USA and its allies and endorsed by the media that have an inclination towards these Nations.

🚫🇨🇳🚫 vs 🇯🇵🇧🇩🇸🇦🇨🇷

If I were anyone of these countries, I would tell china, “No”

Is china then recreating a new colonial era 🤔

All mullahs will like it

These videos are getting so much better! Wonderful presentation.

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Credits: This video sponsored by CCP

When you find something opposes your beliefs: "This is superficial, not well researched.." Add in your typical slogan of "The Hindu is the most anti-Hindu newspaper" and your comment's complete! 👏

Yes it does.....and didn't we know it since I don't remember when. It did the same with Sri Lanka, Pakistan....🙄

Whole world is disturbed because this allien country

Why it seems like that The Hindu itself is a victim of China's debt trap policy 😂 sab bike hue hain

To be fair ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-yPlLdTtbIHI.html Both Sides, Now (Joni Mitchell)