The thing with Chinese manufacturing and technology is that even countries seemingly getting closer to the paper dragon don’t trust them.
Chinese aircraft turn into a big liability for Nepal
Take the case of Nepal. The Himalayan nation purchased some aircraft in 2014 from China and the aircraft fleet has now got reduced into a liability for Nepal due to poor functionality and performance. Moreover, the Himalayan nation is now realising that the sale of Chinese equipment was meant to benefit only Beijing, and that it has been debt-trapped by the Chinese Communist Party (CCP).
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Nepal had acquired the aircraft in question from China in the year 2014. According to HK Post, in July 2020, Nepal Airlines decided to halt operations of all its Chinese aircraft including two Xian MA60s and four Harbin Y12s.
China known to supply substandard equipment
What China has done shouldn’t surprise anyone. The modus operandi of the CCP is to supply substandard equipment and then force the purchaser to spend heavily towards maintenance charges. And you can guess who benefits from such maintenance expenses — well, the Chinese companies.
Nepal Airlines however has claimed that it cannot afford to fly the Chinese aircraft any longer, and has thus grounded them until further notice.
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How did China debt-trap Nepal?
Interestingly, Nepal Airlines had purchased the Chinese aircraft on loan. Then, of course, the aircraft proved to be pretty useless and since the aircraft couldn’t be utilised properly, the carrier has been struggling to make payments. Nepal is however supposed to pay an annual interest rate of 1.5% to the Chinese, apart from management expenses amounting to 0.4% of the overall loan taken by Nepal’s Ministry of Finance. The Ministry in turn charges an annual 8% interest on the disbursed loan.
From the perspective of Nepal Airlines, the aircraft have thus become a total liability. Since the aircraft don’t perform well, they don’t bring any revenue to the coffers of the carrier and at the same time, the charges and costs related to the aircraft keep escalating. The entire deal has thus become an unaffordable one for the Nepalese.
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In fact, Nepal could now be looking to dump the Chinese aircraft, and a board member even described the purchase of Chinese aircraft as Nepal Airlines’ worst decision. China’s faulty manufacturing and equipment has thus been exposed yet again.
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