- According to the Harvard Business Review, China lent $ 1.5 trillion to 150 countries, while the World Bank and IMF lent $ 200 billion
- China lent a dozen countries more than 20% of their GDP; Djibouti is the only country on which China accounts for 77% of total debt
- According to a UN report, China invested $ 139 billion in 2018, a 4% increase over 2017.
Jun 13, 2020, 05:53 AM IST
new Delhi. Mahinda Rajapaksa. Was President of Sri Lanka from 2005 to 2015 and is now Prime Minister. Rajapaksa is credited with ending the three decades of civil war in the country. But, during Rajapaksa's time, Sri Lanka became heavily burdened with debt.
Sri Lanka's distance from India and proximity to China increased during Rajapaksa's tenure. Sri Lanka and China took more advantage of these proximity. Work on the Hambantota port project in Sri Lanka began as soon as Rajapaksa was President. The Sri Lankan government took a loan of $ 1.26 billion from China between 2007 and 2014 for this project. This loan was taken not in one go but in 5 times.
Hambantota ports were already forming China-Sri Lanka together. It has been built by China's largest government company, Harbor Engineering. Whereas, 85% of the money was invested by Exim Bank of China.
The result of constant borrowing was that foreign debt increased on Sri Lanka. It is believed that Sri Lanka had to lease Hambantota port in December 2017 to the Merchant Port Holdings Limited Company of China for 99 years due to mounting debt. Along with the port, Sri Lanka also had to hand over 15,000 acres of land to him. This land is only 150 km from India.
This whole sentence is presented as an example of how China lends infrastructure to the first small country in the name of infrastructure. Makes him his debtor. And then later takes possession of his property.
It is called 'debt-trap diplomacy'.
In the name of infrastructure development, lending first and then capturing that country in a way, it is called 'debt-trap diplomacy'. This word is used for China only. China argues that this will strengthen the infrastructure in a small and developing country. Whereas, his opponents believe that China is occupying small countries by doing this.
A report by the US website Harvard Business Review states that China has been lending to smaller countries since the beginning. In the 1950s and 1960s, China gave loans to many small countries. These were countries where there were communist governments.
Germany's Kiel University released a report on the world economy in June 2019. Accordingly, between 2000 and 2018, China's borrowing on countries increased from $ 500 billion to $ 5 trillion. According to today, 5 trillion dollars is 375 lakh crores.
Apart from all this, the report of Harvard Business Review says that the Chinese government and its companies have given loans of more than 150 countries for $ 1.5 trillion, or 112 lakh 50 thousand crore rupees. At present, China is the largest lender in the world. Even IMF and World Bank did not give this much loan. Both have given a loan of $ 200 billion (Rs 15 lakh crore).
In other words, China has given loans equal to 6% of the world's GDP to other countries.
China owes more than 20% of its GDP to a dozen countries
- According to a Harvard Business Review report, in 2005 China loaned more than 50 countries 1% or even less of their GDP, but by the end of 2017, China started lending more than 15% of their GDP.
- Of these, China has lent more than 20% of its GDP to a dozen countries, such as Djibouti, Tonga, Maldives, Congo, Kyrgyzstan, Cambodia, Niger, Laos, Zambia and Mongolia.
African countries have the most debt
African countries are China's first choice for lending. The reason is that most African countries are poor and small and also developing.
A study in October 2018 shows that in recent years, African countries have borrowed more from China. In 2010, China had a debt of 10 billion dollars (75 thousand crores rupees according to today) on African countries. Which increased to $ 30 billion (2.25 lakh crore rupees) in 2016.
The African country of Djibouti is the only low-income country in the world that has the highest debt of China. Djibouti has foreign debt of over 80% of its GDP. Of this, more than 77% of the debt on Djibouti is from China alone. However, how much is the debt? Its figures do not exist.
Not only debt, China is also investing
- In June last year, the UN Conference on Trade and Development was reported. According to this report, in 2018, countries around the world had invested $ 1.3 trillion (Rs 97.50 lakh crore today). This figure was 13% lower than in 2017.
- Many countries of the world reduced their investment in 2018. In contrast, China's investment in other countries increased by 4%. China invested $ 134 billion in 2017 and $ 139 billion in 2018. Whereas, the US investment was reduced to $ 252 billion.
China is suppressing our neighbors under debt
Since 2013, China has been working on the Belt and Road Initiative project. The project aims to connect Asia, Europe and Africa by road, rail and sea. The entire project is estimated to cost $ 1 trillion or Rs 75 lakh crore. Most of the countries that are supporting this project of China have now become debtors to China.
The China-Pakistan Economic Corridor or CPEC is also part of this project. Both China and Pakistan are working together on this. This corridor connects Kashgar province of China to Gwadar port of Pakistan. It costs 46 billion dollars (about 3.50 lakh crore rupees). China alone is spending around 80% of this. The result – Pakistan is gradually becoming China's debtor. According to the IMF, by 2022 Pakistan owes China $ 6.7 billion.
Similarly, Nepal is also supporting this project of China. In October last year, Chinese President Xi Jinping visited Nepal on a two-day visit. This was the first time after 23 years that a Chinese President visited Nepal. During this visit, Jinping had announced a grant of 56 billion Nepalese rupees (35 billion rupees) to Nepal for infrastructure development.
Bangladesh, like Pakistan, Nepal and Sri Lanka, is also part of China's Belt and Road Initiative project. As of January 2019, there was a turnover of $ 10 billion between China and Bangladesh. It is estimated that by 2021, the two countries will have a turnover of $ 18 billion. Bangladesh becoming a part of China's project is also a cause for concern because it will pass very close to Kolkata.
Is China's debt on India too?
According to the Finance Ministry data, as of December 2019, India has a foreign debt of 40 lakh 18 thousand 389 crores. However, how much debt does the country have? Its figures could not be found.