this post was submitted on 29 May 2025
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China has dramatically curtailed its lending in recent years. Now, it's emerging as the largest debt collector for many of the world's poorest nations — a shift that threatens to undermine poverty reduction efforts and fuel instability, according to a new report.

Lending for China's Belt and Road Initiative — which includes funding for a massive series of new railways, ports and roads in the developing world — began winding down before the COVID-19 pandemic, according to Peak repayment: China's global lending, released this month by Australia's Lowy Institute, a foreign policy think tank. The report points to diplomatic pressure within China to restructure unsustainable debt and to recover outstanding debts from abroad for the change.

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[–] [email protected] 13 points 4 days ago (20 children)

Okay gang, I need you to think a bit more critically than 'China Bad.' First, why was the term "debt collector" used? China lent money, now they're taking payments. Is that debt collecting, or just the second part of lending money? Is a mortgage lender a debt collector? That's a loaded term meant to give you a negative impression, cuz no one likes a debt collector except perhaps an American hospital.

Second, the countries agreed to the loans. Paying them back was expected and predictable. If payments can't be made, then the debt will be restructured, meaning the payment schedule will be modified so the debtor country can make payments.

Third, the money was often used to build a potentially money-making asset, like a port. If used correctly, the assest should pay for a decent chunk of the loan.

Forth, I see a lot of half baked comments like 'China will take the port back' or 'China will take the hospital.' You must first ask, with what will China take back an African port, or hospital, or whatever? They don't have the means. They're not going to park an aircraft carrier off the coast and drop bombs until the loan is repayed, because they can't. So what does China want? China doesn't want the fucking port, they want resources and friends with benefits.

China's basically going here's a loan, build a port to import goods for your people. Import from whoever you like, it's your port. Oh by the way we make the cheapest and best everything (cuz they do), we'd be happy to sell you whatever you want, like solar panels or EVs. We also need colbalt and the finest silicon sand to build you these awesome EVs and solar panels you want, so we'll buy that from your mines and use your cool new port to ship it. Here's the loan payment schedule. No payments for the first 5 years, then afterward you pay X per year for 20-30 years. Oh no, you're having trouble making payments? Well we benefit from you having that port too, so let's restructure that debt so your people don't revolt and get cozy with the US.

There's no fucking debt trap. That's just racist and moronic. 'Those sneaky Chinese tricked the backwards brown people with a loan they can't repay.' Plus you can't repossess a structure on the other side of the world without a credible threat of violence. China does not have the means. Economic coercion, sure, but the debtor agreed to that and they're not stupid.

[–] Skiluros 5 points 4 days ago (3 children)

This is false. In case of Sri Lanka, they did take the port back and arguably the whole thing was setup since the economic viability of the port is suspect.

https://www.nytimes.com/2018/06/25/world/asia/china-sri-lanka-port.html

You're either ignorant or a demagogue.

[–] taladar 4 points 3 days ago (1 children)

the economic viability of the port is suspect.

If the economic viability of the port is suspect what does China gain by taking it back? An asset that is losing them money instead of losing Sri Lanka money? Or are they managing it better so it produces a profit for them but not under Sri Lankan management? Are they selling off the assets to try to recoup as much of their investment as possible but still end up worse off than if they never paid for it in the first place?

What is the allegation here?

[–] Skiluros 1 points 2 days ago

That China's investments aren't necessarily beneficial for the country host country.

There is an element of domination and geopolitics (having a de facto military port on India's doorstep).

[–] [email protected] 4 points 3 days ago (1 children)

nytimes isnt necessarily a trusted source for unbiased information about china, or americas dealings. that aside, i wish i could read that article without them demanding or selling my information. so can you post a breakdown for us paranoids?

[–] Skiluros 3 points 3 days ago (1 children)
[–] taladar 3 points 3 days ago (1 children)

That article seems to focus on environmental sustainability, which, while important, doesn't really mention the economic viability aspect that was part of the allegations earlier in this thread.

[–] Skiluros 1 points 2 days ago

Different port. I am referring to the one from 2018.

[–] [email protected] 1 points 3 days ago (1 children)

I can't get past NYT's paywall, and it's the NYT, they're not going to give an unbiased assessment, but I found the wikipedia article. I'm failing to see how China "took the port back." Looks like a Chinese company bought an 85% stake into Hambantota International Port Group, an entity created by the Sri Lanken government to run the port. The agreement allows the Chinese company to operate the port for 99 years.

Then there's this bit:

Writing in 2023, academic and former UK diplomat Kerry Brown states that China's relationship to the Hambantota port has become the opposite of the theorized debt-trap modus operandi. Brown observes that China has had to commit more money to the project, expose itself to further risk, and has had to become entangled in complex local politics. As of at least 2024, the port is not a significant commercial success, although shipping through the port is increasing. 

[–] Skiluros 0 points 2 days ago (1 children)
[–] [email protected] 1 points 1 day ago (1 children)

Said the pot to the kettle... your claim was refuted by several people. Maybe reconsider your stance?

[–] Skiluros 0 points 1 day ago (1 children)

What wasn't refuted?

The port has no commercial viability. If it does, show me its transactions relative to ports of comparable size in say south India.

Have you ever lived or visited the region? Sri Lanka or south India. Or any part of the Indian subcontinent. Or any part of Asia for that matter.

Prove me wrong! I will admit I am wrong and will appreciate the correction.

[–] [email protected] 1 points 1 day ago (1 children)

Well...you started with the idea that the financing of the port was a debt trap. I and others have already provided info stating otherwise. You appear to be moving the goalposts.

[–] Skiluros 1 points 23 hours ago* (last edited 23 hours ago) (1 children)

What info have you provided?

There is no moving goalposts. From the Wikipedia article:

Construction of the port commenced in January 2008. In 2016, it reported an operating profit of $1.81 million but was considered economically unviable.[4] As debt repayment got difficult, the newly-elected government decided to privatise an 80% stake of the port to raise foreign exchange in order to repay maturing sovereign bonds unrelated to the port.[5][6] Of the two bidding companies, China Merchants Port was chosen,[5] which was to pay $1.12 billion to Sri Lanka and spend additional amounts to develop the port into full operation.[7][8][9]

In July 2017, the agreement was signed, but CMPort was allowed a 70% stake. Simultaneously a 99-year lease on the port was granted to CMPort.

Can you explain Kerry Brown's arguement in context of this information?

[–] [email protected] 1 points 21 hours ago (1 children)

Brown observes that China has had to commit more money to the project, expose itself to further risk, and has had to become entangled in complex local politics.

That's not how a debt trap is supposed to work.

[–] Skiluros 0 points 20 hours ago* (last edited 15 hours ago) (1 children)

Says who?

It's pretty clear you have no clue what you are talking about or you're playing dumb (in an effort to work as a free PR shill for China).

I am done here!

[–] [email protected] 1 points 16 hours ago

Said the pot to the kettle. I'm done too.

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