Furthermore to be Socialist would be to aid comrades internationally, yet China not only has not promised to ever do this (nor is this something Communist would ever dare hide from the Global masses), but they’ve actually done the opposite on multiple occasions."
But China does aid “comrades” by working with any country, regardless of the complaints of the imperial core, and promoting mutually beneficial, win-win cooperation and pro-Global South industrialization and modernization. Just recently, China pledged to help defend Venezuela’s national sovereignty and economic transition into an industrial economy rather than simply existing as a raw material exporter. China’s foreign policy in the past has not always been great, but that does not mean that we should let the mistakes overshadow the accomplishments. That would just be historical nihilism. The commenter’s idea of internationalism seems to be incessantly lending arms and money into so-called Maoist armies, but this is not China’s approach to diplomacy—China is not the USSR and shouldn’t strive to be!
I’m not even going to bother with the rest of this childish take—nothing but rhetoric and overzealous dogmatism over material reality.
I mean, I think there are valid criticisms about the Deng reforms that can be compared Khrushchev. Tons of communist within and without china had similar apprehensions about allowing capitalism to become entangled with communism. A good perspective from a party member at the time can be found in From Victory to Defeat.
But China does aid “comrades” by working with any country, regardless of the complaints of the imperial core, and promoting mutually beneficial, win-win cooperation and pro-Global South industrialization and modernization.
The problem is that we don’t actually really know how these loans are structured, nor what their eventual outcomes may be. China is intensely secretive about their financial dealings with their partners. What we do know is that since 2020 countries like Kenya, Sri Lanka, Zambia, and Mongolia have been being economically hamstrung from loan repayments, with as much of 1/3 of their gdp going towards interest payments. I believe both Zambia and Sri Lanka have both defaulted on their loans, how china deals with these defaults will say a lot about the nature of their economic outreach programs.
I remember reading about Sri Lanka, how it’s a prime example of the lie about Chinese debt diplomacy. To quote the article: “Research shows that Chinese banks are willing to restructure the terms of loans and have never actually seized an asset from any country, much less the port of Hambantota”
“Research shows that Chinese banks are willing to restructure the terms of loans and have never actually seized an asset from any country, much less the port of Hambantota”
I hadn’t read the misinformation about China claiming that they were trying to seize a port. My main concern is that a lot of the details of the financial arrangements made in the past haven’t ever been made public. Which means they probably aren’t being made with a high degree of public input, despite the general public being the one who will have to pay them back.
Another concern is that there have already been multiple defaults, which either means China isn’t doing a lot to ensure the country have the ability to remain in solvency. Or that they don’t really care if they get the money back… in which case, why structure the loans with such an aggressive payment program in the first place?
It’s been a while since I looked at the default in Sri Lanka, and after reviewing it does look like they are in talks to restructure terms at least enough to qualify for an IMF loan.
However, unless we seen the actual terms it could be a robbing peter to pay Paul scenario.
And again, this isn’t just some accusation about China being inherently evil or sneaky. It’s just extremely hard to effectively materially support smaller countries in a significant way that doesn’t have unforseen consequences on their domestic political structure.
I don’t know much about them, but in what way are they aggressive?
Or that they don’t really care if they get the money back
To some extent, yes.
The second problem with the narrative is that it relies on the assumption that it is Chinese policy to advance predatory loans with onerous terms and conditions to ensnare countries into debt. In reality, China often advances loans at fairly low interest rates, and is often willing to restructure the terms of existing loans to be more favorable to the borrowing country, or even forgive loans altogether. In fact, in August of 2022, the Chinese government announced it was forgiving 23 interest-free loans in 17 African countries. Prior to that, between 2000 and 2019, China had also restructured a total of $15 billion of debt and forgiven $3.4 billion in loans they had given to African countries.
don’t know much about them, but in what way are they aggressive?
It’s hard to be exact, as I have said they tend to keep the details pretty close to their chest. But the oddest thing I have seen is several countries defaulting within just a few years of them being written.
Usually if you weren’t being aggressive with your terms , there would be a windfall period of low to no interest payments before you would start collecting. This gives the borrower some time to recoup their investment before having to make payments.
I have also seen claims, (with no real evidence) that in the terms of the loan is a clause that forces the borrower to create an escrow account that pays the loan in advance of other responsibilities. But as I said, those claims didn’t really back it up with a lot evidence.
China often advances loans at fairly low interest rates, and is often willing to restructure the terms of existing loans to be more favorable to the borrowing country, or even forgive loans altogether. In fact, in August of 2022, the Chinese government announced it was forgiving 23 interest-free loans in 17 African countries. Prior to that, between 2000 and 2019, China had also restructured a total of $15 billion of debt and forgiven $3.4 billion in loans they had given to African countries.
I think this article is conflating ifl loans with commercial and policy bank loans. IFL loans are small interest free loans that china typically allocates to developing nations for specific state works. They’re kinda a small grant that china utilizes to spread influence and open doors in the southern hemisphere.
Unfortunately ifl loans only account for about 1% of the total 159 billion in loans given to Africa from 2010-2020. And the actual loan forgiveness for African IFL programs has only been estimated to be worth between 132-402 million dollars.
I have also seen claims, (with no real evidence) that in the terms of the loan is a clause that forces the borrower to create an escrow account that pays the loan in advance of other responsibilities. But as I said, those claims didn’t really back it up with a lot evidence
The liberationnews article did contain this:
But according to analysis by AidData, who obtained a copy of the contract, the airport was not even a source of collateral that the lender could seize in the first place! What the conditions of the agreement did require was that cash collateral be placed in a separate escrow account which could then be seized in the event of default — a fairly standard clause for international projects financing
But according to analysis by AidData, who obtained a copy of the contract, the airport was not even a source of collateral that the lender could seize in the first place! What the conditions of the agreement did require was that cash collateral be placed in a separate escrow account which could then be seized in the event of default — a fairly standard clause for international projects financing
Minus the misinformation about them supposedly wanting to seize the airport, that’s fairly close to what I have read in the past about the escrow account. Though I wouldn’t say that it’s fairly standard.
It can be a normal part of thing like IMF loans or aid packages, however they are usually set up in conjunction with the borrowers other lenders. Very rarely are they made in secret or behind closed doors, as the escrow accounts are usually made to assure other borrowers that the new lender is a part of the payment program, and not restructuring the payment program in their favour.
And again this is all fairly speculative, the last time I read an article that includes info on the escrow account it was from AP who also claimed they had a copy. However, I haven’t seen anyone actually publish it which makes me pretty skeptical.
But China does aid “comrades” by working with any country, regardless of the complaints of the imperial core, and promoting mutually beneficial, win-win cooperation and pro-Global South industrialization and modernization. Just recently, China pledged to help defend Venezuela’s national sovereignty and economic transition into an industrial economy rather than simply existing as a raw material exporter. China’s foreign policy in the past has not always been great, but that does not mean that we should let the mistakes overshadow the accomplishments. That would just be historical nihilism. The commenter’s idea of internationalism seems to be incessantly lending arms and money into so-called Maoist armies, but this is not China’s approach to diplomacy—China is not the USSR and shouldn’t strive to be!
I’m not even going to bother with the rest of this childish take—nothing but rhetoric and overzealous dogmatism over material reality.
I mean, I think there are valid criticisms about the Deng reforms that can be compared Khrushchev. Tons of communist within and without china had similar apprehensions about allowing capitalism to become entangled with communism. A good perspective from a party member at the time can be found in From Victory to Defeat.
The problem is that we don’t actually really know how these loans are structured, nor what their eventual outcomes may be. China is intensely secretive about their financial dealings with their partners. What we do know is that since 2020 countries like Kenya, Sri Lanka, Zambia, and Mongolia have been being economically hamstrung from loan repayments, with as much of 1/3 of their gdp going towards interest payments. I believe both Zambia and Sri Lanka have both defaulted on their loans, how china deals with these defaults will say a lot about the nature of their economic outreach programs.
I remember reading about Sri Lanka, how it’s a prime example of the lie about Chinese debt diplomacy. To quote the article: “Research shows that Chinese banks are willing to restructure the terms of loans and have never actually seized an asset from any country, much less the port of Hambantota”
I hadn’t read the misinformation about China claiming that they were trying to seize a port. My main concern is that a lot of the details of the financial arrangements made in the past haven’t ever been made public. Which means they probably aren’t being made with a high degree of public input, despite the general public being the one who will have to pay them back.
Another concern is that there have already been multiple defaults, which either means China isn’t doing a lot to ensure the country have the ability to remain in solvency. Or that they don’t really care if they get the money back… in which case, why structure the loans with such an aggressive payment program in the first place?
It’s been a while since I looked at the default in Sri Lanka, and after reviewing it does look like they are in talks to restructure terms at least enough to qualify for an IMF loan.
However, unless we seen the actual terms it could be a robbing peter to pay Paul scenario.
And again, this isn’t just some accusation about China being inherently evil or sneaky. It’s just extremely hard to effectively materially support smaller countries in a significant way that doesn’t have unforseen consequences on their domestic political structure.
I don’t know much about them, but in what way are they aggressive?
To some extent, yes.
https://www.liberationnews.org/why-chinese-debt-trap-diplomacy-is-a-lie/
It’s hard to be exact, as I have said they tend to keep the details pretty close to their chest. But the oddest thing I have seen is several countries defaulting within just a few years of them being written.
Usually if you weren’t being aggressive with your terms , there would be a windfall period of low to no interest payments before you would start collecting. This gives the borrower some time to recoup their investment before having to make payments.
I have also seen claims, (with no real evidence) that in the terms of the loan is a clause that forces the borrower to create an escrow account that pays the loan in advance of other responsibilities. But as I said, those claims didn’t really back it up with a lot evidence.
I think this article is conflating ifl loans with commercial and policy bank loans. IFL loans are small interest free loans that china typically allocates to developing nations for specific state works. They’re kinda a small grant that china utilizes to spread influence and open doors in the southern hemisphere.
Unfortunately ifl loans only account for about 1% of the total 159 billion in loans given to Africa from 2010-2020. And the actual loan forgiveness for African IFL programs has only been estimated to be worth between 132-402 million dollars.
The liberationnews article did contain this:
Minus the misinformation about them supposedly wanting to seize the airport, that’s fairly close to what I have read in the past about the escrow account. Though I wouldn’t say that it’s fairly standard.
It can be a normal part of thing like IMF loans or aid packages, however they are usually set up in conjunction with the borrowers other lenders. Very rarely are they made in secret or behind closed doors, as the escrow accounts are usually made to assure other borrowers that the new lender is a part of the payment program, and not restructuring the payment program in their favour.
And again this is all fairly speculative, the last time I read an article that includes info on the escrow account it was from AP who also claimed they had a copy. However, I haven’t seen anyone actually publish it which makes me pretty skeptical.