• Latest
  • Most Read
China gave away billions of dollars as BRI loans to different countries. Now they are not coming back

China gave away billions of dollars as BRI loans to different countries. Now they are not coming back

3 years ago
The strange tale of Rabinder Singh, the CIA mole who ended up as a nobody

The strange tale of Rabinder Singh, the CIA mole who ended up as a nobody

1 day ago
Karnam Malleswari: The greatest woman sports icon ignored by Bharat

Karnam Malleswari: The greatest woman sports icon ignored by Bharat

1 day ago
Alliance between Khalistanis and Manipur seperatists?

Alliance between Khalistanis and Manipur seperatists?

1 day ago
We need to resuscitate abandoned temples, not beg for “World Heritage Site Status”!

We need to resuscitate abandoned temples, not beg for “World Heritage Site Status”!

1 day ago
Manish Kashyap: The Thorn in Nitish Kumar’s Side

Manish Kashyap: The Thorn in Nitish Kumar’s Side

1 day ago
Rahul Sharma: A true symbol of Sanatana Dharma

Rahul Sharma: A true symbol of Sanatana Dharma

1 day ago
Maharaja Kharavela: Perhaps the greatest Indian King ever

Maharaja Kharavela: Perhaps the greatest Indian King ever

1 day ago
The Vaccine War review: Yes, Bharat can do it!

The Vaccine War review: Yes, Bharat can do it!

2 days ago
Debt is where AAP is!

Debt is where AAP is!

2 days ago
Who is Jaswant Singh Gill, the inspiration behind ‘Mission Raniganj’?

Who is Jaswant Singh Gill, the inspiration behind ‘Mission Raniganj’?

2 days ago
Operation: Home Ministry orders CBI probe against Kejriwal’s “Sheeshmahal”!

Operation: Home Ministry orders CBI probe against Kejriwal’s “Sheeshmahal”!

2 days ago
Washington Post leaks the truth about Nijjar’s death

Washington Post leaks the truth about Nijjar’s death

2 days ago
No, OYO is not the communion spot for horny youngsters!

No, OYO is not the communion spot for horny youngsters!

2 days ago
IAS officer Rinku Dugga who took her dog for a walk in the stadium “Compulsorily Retired”!

IAS officer Rinku Dugga who took her dog for a walk in the stadium “Compulsorily Retired”!

2 days ago
AFSPA re-imposed in Manipur after several months!

AFSPA re-imposed in Manipur after several months!

2 days ago
  • About us
  • Careers
  • Brand Partnerships
TFI Official Merchandise
TFI हिन्दी
TFI Global
Sunday, October 1, 2023
Tfipost.com
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    Karnam Malleswari: The greatest woman sports icon ignored by Bharat

    Karnam Malleswari: The greatest woman sports icon ignored by Bharat

    Alliance between Khalistanis and Manipur seperatists?

    Alliance between Khalistanis and Manipur seperatists?

    We need to resuscitate abandoned temples, not beg for “World Heritage Site Status”!

    We need to resuscitate abandoned temples, not beg for “World Heritage Site Status”!

    Manish Kashyap: The Thorn in Nitish Kumar’s Side

    Manish Kashyap: The Thorn in Nitish Kumar’s Side

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    How TVS transformed from a truck maker to a motorcycle giant

    How TVS transformed from a truck maker to a motorcycle giant

    ASUS to relocate its primary manufacturing hub from China to India

    ASUS to relocate its primary manufacturing hub from China to India

    US Business Basics: Essential Legal and Regulatory Insights for Indian Founders

    US Business Basics: Essential Legal and Regulatory Insights for Indian Founders

    Why IKEAs and Urban Ladders could not replace the friendly neighbourhood carpenter

    Why IKEAs and Urban Ladders could not replace the friendly neighbourhood carpenter

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    new CBI director Praveen sood biography

    Who is Praveen Sood the New CBI Director: Professional Background, Achievements and Significance of the Appointment

    Paramjit Singh Panjwar shot dead

    Paramjit Singh Panjwar shot dead: Keep calm and trust the Indian Armed Forces

    Swarm satellites

    India’s Bold Step towards Satellite Swarm Intelligence: A New Era in Space Technology

    INS Vikrant gets historic 1961 bell of 1st warship from ex-Navy vice chief

    INS Vikrant gets historic 1961 bell of 1st warship from ex-Navy vice chief

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Washington Post leaks the truth about Nijjar’s death

    Washington Post leaks the truth about Nijjar’s death

    The sad, tragic journey of Justin Trudeau

    The sad, tragic journey of Justin Trudeau

    Canada learns diplomacy the “Jaishankar Way”

    Canada learns diplomacy the “Jaishankar Way”

    “Why don’t ask Pakistan for Khalistan?” Canadian journalist drops a bombshell

    “Why don’t ask Pakistan for Khalistan?” Canadian journalist drops a bombshell

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • Education
    • History
    • Indology
    The strange tale of Rabinder Singh, the CIA mole who ended up as a nobody

    The strange tale of Rabinder Singh, the CIA mole who ended up as a nobody

    Maharaja Kharavela: Perhaps the greatest Indian King ever

    Maharaja Kharavela: Perhaps the greatest Indian King ever

    NAVIGATING THE CCNA EXAM: A BEGINNER’S HANDBOOK TO IT CERTIFICATION

    NAVIGATING THE CCNA EXAM: A BEGINNER’S HANDBOOK TO IT CERTIFICATION

    When BR Ambedkar openly challenged the Nizam Shahi

    When BR Ambedkar openly challenged the Nizam Shahi

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Food
    • Games
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    The Vaccine War review: Yes, Bharat can do it!

    The Vaccine War review: Yes, Bharat can do it!

    Who is Jaswant Singh Gill, the inspiration behind ‘Mission Raniganj’?

    Who is Jaswant Singh Gill, the inspiration behind ‘Mission Raniganj’?

    Sanath Jayasuriya, the greatest all-rounder who never got his due

    Sanath Jayasuriya, the greatest all-rounder who never got his due

    Celery Soup health benefits

    9 Health Benefits of Celery Soup: Exploring the Nutritional Elixir

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
No Result
View All Result
Tfipost.com
  • Premium
  • Politics
    • All
    • Analysis
    • Opinions
    • Trending
    Karnam Malleswari: The greatest woman sports icon ignored by Bharat

    Karnam Malleswari: The greatest woman sports icon ignored by Bharat

    Alliance between Khalistanis and Manipur seperatists?

    Alliance between Khalistanis and Manipur seperatists?

    We need to resuscitate abandoned temples, not beg for “World Heritage Site Status”!

    We need to resuscitate abandoned temples, not beg for “World Heritage Site Status”!

    Manish Kashyap: The Thorn in Nitish Kumar’s Side

    Manish Kashyap: The Thorn in Nitish Kumar’s Side

    • Analysis
    • Opinions
    • Trending
  • Economy
    • All
    • Business
    • Economy1
    • Finance
    How TVS transformed from a truck maker to a motorcycle giant

    How TVS transformed from a truck maker to a motorcycle giant

    ASUS to relocate its primary manufacturing hub from China to India

    ASUS to relocate its primary manufacturing hub from China to India

    US Business Basics: Essential Legal and Regulatory Insights for Indian Founders

    US Business Basics: Essential Legal and Regulatory Insights for Indian Founders

    Why IKEAs and Urban Ladders could not replace the friendly neighbourhood carpenter

    Why IKEAs and Urban Ladders could not replace the friendly neighbourhood carpenter

    • Business
    • Finance
  • Defense
    • All
    • Defence
    • Strategy
    • Weaponry
    new CBI director Praveen sood biography

    Who is Praveen Sood the New CBI Director: Professional Background, Achievements and Significance of the Appointment

    Paramjit Singh Panjwar shot dead

    Paramjit Singh Panjwar shot dead: Keep calm and trust the Indian Armed Forces

    Swarm satellites

    India’s Bold Step towards Satellite Swarm Intelligence: A New Era in Space Technology

    INS Vikrant gets historic 1961 bell of 1st warship from ex-Navy vice chief

    INS Vikrant gets historic 1961 bell of 1st warship from ex-Navy vice chief

    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • All
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
    Washington Post leaks the truth about Nijjar’s death

    Washington Post leaks the truth about Nijjar’s death

    The sad, tragic journey of Justin Trudeau

    The sad, tragic journey of Justin Trudeau

    Canada learns diplomacy the “Jaishankar Way”

    Canada learns diplomacy the “Jaishankar Way”

    “Why don’t ask Pakistan for Khalistan?” Canadian journalist drops a bombshell

    “Why don’t ask Pakistan for Khalistan?” Canadian journalist drops a bombshell

    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • All
    • Culture
    • Education
    • History
    • Indology
    The strange tale of Rabinder Singh, the CIA mole who ended up as a nobody

    The strange tale of Rabinder Singh, the CIA mole who ended up as a nobody

    Maharaja Kharavela: Perhaps the greatest Indian King ever

    Maharaja Kharavela: Perhaps the greatest Indian King ever

    NAVIGATING THE CCNA EXAM: A BEGINNER’S HANDBOOK TO IT CERTIFICATION

    NAVIGATING THE CCNA EXAM: A BEGINNER’S HANDBOOK TO IT CERTIFICATION

    When BR Ambedkar openly challenged the Nizam Shahi

    When BR Ambedkar openly challenged the Nizam Shahi

    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • All
    • Books
    • Cinema
    • Food
    • Games
    • Health
    • Lifestyle
    • Satire
    • Sports
    • technology
    • Travel
    The Vaccine War review: Yes, Bharat can do it!

    The Vaccine War review: Yes, Bharat can do it!

    Who is Jaswant Singh Gill, the inspiration behind ‘Mission Raniganj’?

    Who is Jaswant Singh Gill, the inspiration behind ‘Mission Raniganj’?

    Sanath Jayasuriya, the greatest all-rounder who never got his due

    Sanath Jayasuriya, the greatest all-rounder who never got his due

    Celery Soup health benefits

    9 Health Benefits of Celery Soup: Exploring the Nutritional Elixir

    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
No Result
View All Result
Tfipost.com
No Result
View All Result

HOME » Economy » Economy1 » China gave away billions of dollars as BRI loans to different countries. Now they are not coming back

China gave away billions of dollars as BRI loans to different countries. Now they are not coming back

Can we call it an NPA crisis?

TFIPOST News Desk
by TFIPOST News Desk
29 August 2020
in Economy1
0
China gave away billions of dollars as BRI loans to different countries. Now they are not coming back

(PC: Wall Street Journal)

1.5k
VIEWS
Share on FacebookShare on Twitter

In the last few months, a series of countries asked China to restructure loans given under the Belt and Road Initiative (BRI). These countries, to whom China offered loans at very high interest rates, are now unable to pay back the loans as Coronavirus destroyed the economy of countries around the world.

Moreover, the countries are asking for restructuring or write offs because Chinese banks offered them loans at very high interest rates, ranging from 5 to 10 percent. However, over the last few years, the cost of capital has come significantly down as the central banks across the countries flooded their markets with cheap money in order to incentivize economic growth.

But, given the structural issues, the economic growth in most of the countries was low and Covid-19 has taken the growth into negative territory.

In such a situation, the countries are unable to pay back the loans as tax collection has already depleted and whatever reserves are left are being used to support the businesses amid pandemic. So, the cost of capital has come down significantly compared to 2013 when Chinese banks started giving these loans. Most of the central banks lowered the policy rates in the last few years and interest rates in the majority of the countries are below 5 percent while China lended at “exorbitant rates” ranging from 5 to 10 percent.

So, now BRI not only suffers from geopolitical problems but structural economic issues, too. And any further progress on Xi Jinping’s ambitious plan is next to impossible and most of the countries will take more than two to three years to come over the economic shock due to the pandemic. By then, the plan to connect the world will be in cold storage.

For simply understanding how China wasted trillions of dollars through BRI, compare it with India’s Non-Performing Assets (NPA) problem. Between 2008 and 2012, Indian banks were on a lending spree and even the corporates which the banks knew that could not pay back were getting loans. The Indian economy went through a bad phase between 2012 to 2014 and economic growth slowed down to sub-5 percent. Therefore, the corporates who took loans at 10-12 percent obviously could not pay back if the economy is growing below 5 percent and this is how the country accumulated bad loans worth more than 10 lakh crores.

Now, either these companies have to pay back with their assets for loans or go insolvent. Similarly, in the case of BRI, countries like Sri Lanka have to pay back by leasing the port for 99 years to China’s state owned company. But, in the case of a sovereign nation, they can simply default on that loan and refuse to pay back. And this is exactly what many nations in Africa are doing or plan to do with BRI loans. So, the majority of the 1 trillion dollars that Chinese invested in countries around the world is now a bad loan.

However, China has not lost much financially as most of the projects of BRI were given to Chinese companies so whatever loans Chinese banks offered came back to China in the form of money for project allocation. “A Chinese company [thus] receives much of the proceeds of the loan, but the host country has got the debt. If the [return on investment] isn’t sufficient to pay off the debt, China will repossess [the project, and it] becomes a debt-for-equity swap,” said said Marshall W. Meyer, Wharton emeritus professor of management and a China expert.

But, as the countries are either simply moving away from projects or refusing to pay back the money borrowed, the Chinese strategy of “debt-trap diplomacy” fails. All the countries are not as good or as reputed as Sri Lanks that they will hand over the property if unable to pay back the loans. And this simply means, China has lost a huge amount (although not as much predicted by many experts as most of the loans went to Chinese companies) and Xi Jinping’s grand plan of global domination through BRI is dead.

Share44TweetSend
Previous Post

India killed RCEP and hence killed China’s dreams of trade deals with the rest of the world

Next Post

Philippines has an important lesson for all countries cozying up to China: China will gobble you up sooner or later

TFIPOST News Desk

TFIPOST News Desk

India’s most loved Right-Wing blog

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms of use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

  • Most Read
  • Comments
  • Latest
Xi Jinping, coronavirus, Shinzo Abe, china, Japan, coornavirus, COVID-19, Wuhan Virus

‘Pack up and get out of there,’ Japan to spend $2.2 billion to get Japanese companies to exit China

9 April 2020
ajay devgn karan johar

The man who bullied the Bully – How Ajay Devgn made Karan Johar’s monopoly a joke and forced him to apologize

22 June 2020
Huawei, China, Trump, USA, Xi Jinping

‘Our survival is at stake now,’ Chinese Telecom giant Huawei crumbles after US ban on Semiconductor exports

19 May 2020
T-Series Sonu Nigam Divya Khosla Kumar Bhushan Kumar

T-Series forced to take down Atif Aslam’s video, Divya Khosla trolled. T-Series has a bad day in office

25 June 2020
Meat Ban

A Jain responds to Meat Ban in Mumbai

Public Sector Bank, Government, Bill

Dear bank employees, continue your stride but PSBs will be privatized

anti-Hindi

Anti-Hindi Forever?- In search of a National Language!

Dear Liberals – your Beef Parties are not protests, they just intend to displease the Majority

Dear Liberals – your Beef Parties are not protests, they just intend to displease the Majority

The strange tale of Rabinder Singh, the CIA mole who ended up as a nobody

The strange tale of Rabinder Singh, the CIA mole who ended up as a nobody

29 September 2023
Karnam Malleswari: The greatest woman sports icon ignored by Bharat

Karnam Malleswari: The greatest woman sports icon ignored by Bharat

29 September 2023
Alliance between Khalistanis and Manipur seperatists?

Alliance between Khalistanis and Manipur seperatists?

29 September 2023
We need to resuscitate abandoned temples, not beg for “World Heritage Site Status”!

We need to resuscitate abandoned temples, not beg for “World Heritage Site Status”!

29 September 2023

Popular This Week

Vijay Darda Coalgate
Opinions

The Vijay Darda Cover-Up: How media shielded a Coalgate scam mastermind

by Atul Kumar Mishra
25 September 2023
India Vs Canada+West: What happened, why it happened and what will happen?
Geopolitics

India Vs Canada+West: What happened, why it happened and what will happen?

by Atul Kumar Mishra
24 September 2023
“Why don’t ask Pakistan for Khalistan?” Canadian journalist drops a bombshell
Geopolitics

“Why don’t ask Pakistan for Khalistan?” Canadian journalist drops a bombshell

by Animesh Pandey
27 September 2023
No more Bollywood films for Nayanthara?
Cinema

No more Bollywood films for Nayanthara?

by Animesh Pandey
22 September 2023
Trudeau Loses America to Modi’s Magic
Geopolitics

Trudeau Loses America to Modi’s Magic

by Animesh Pandey
25 September 2023

©2023 TFI Media Private Limited

  • Terms of use
  • Privacy Policy
  • Sitemap
No Result
View All Result
  • Premium
  • Politics
    • Analysis
    • Opinions
    • Trending
  • Economy
    • Business
    • Finance
  • Defense
    • Defence
    • Strategy
    • Weaponry
  • Geopolitics
    • Africa
    • Americas
    • Asia Pacific
    • Europe
    • South Asia
    • West Asia
  • Knowledge
    • Culture
    • History
    • Indology
  • Law
  • Lounge
    • Books
    • Cinema
    • Food
    • Health
    • Sports
    • technology
    • Travel
    • Satire
TFI Official Merchandise
TFI हिन्दी
TFI Global
  • About us
  • Careers
  • Brand Partnerships

©2023 TFI Media Private Limited

Follow us on Twitter

and never miss an insightful take by the TFIPOST team

Follow @tfipost