Following the patterns and destinations of Chinese financing within the framework of the Belt and Road Initiative countries, we find that among the 68 countries participating in the initiative, about 33 countries have a low credit rating and less than investment grade, we find that China is financing investments at low interest rates in high credit risk countries. There are 31 Belt and Road Initiative countries whose sovereign debts are classified between very bad and countries that are not classified at all, such as Iran, Turkmenistan, and Uzbekistan. This means that the Chinese government knows in advance that the chances of recovering debts are almost non-existent, and yet it pumps billions into infrastructure financing loans. It is carried out by Chinese companies and workers that ultimately go to China.
We find, for example, that the debt-to-GDP ratio in Djibouti increased from 50% in 2014 to 85% in 2016 thanks to Chinese debt. In Djibouti, whose GDP reached about $1.8 billion in 2017, China loaned $1.4 billion to finance several infrastructure projects, including A new seaport in Gupt and two airports!!
In Angola – an oil-rich country – the debt-to-GDP ratio reached 29.5% in 2012, reaching 80.5% in 2018, with a total of $46.9 billion. China alone owns more than 50% of the value of these debts, and most of the country’s oil exports go to pay off these Chinese debts. As for Kenya, Chinese debts amount to approximately 30% of the total external debts of the Kenyan government. In Cameroon, the proportion of China’s external debt is approximately 29% of the country’s total external debt, while the share of the rest of the countries in Kenyan external debts is only 2%. Looking at the Chinese acquisitions of many sea ports, we find Many of them occurred as a result of debt trap policies, whereby China, through its state-owned institutions, floods poor countries with debt by lending to those countries to finance infrastructure and development projects of questionable economic feasibility, to be implemented by Chinese companies, and Chinese workers have the largest share in them, and when these countries fail to pay… Loans: China takes over these projects. This is what happened in the port of Hambantota in Sri Lanka, for which China was able to obtain an ownership concession for 99 years. The situation was repeated in the Pakistani port of Gwadar. It was also able to acquire a controlling stake in the ownership of the Greek port of Piraeus at a low price during the crisis. Greek debt.
In Somalia, China obtained exclusive fishing rights off the coast of Somalia, in addition to a share in the port of Mogadishu, in exchange for a loan worth $200 million to rebuild the port. China also acquired Kenneth Kaunda Airport in Zambia, and there is currently a Chinese threat to seize the strategic port of Mombasa in Kenya if Kenya fails to pay. Its debt to China.
Thus, we find that we are facing a specific pattern of flooding poor countries with low credit ratings with debts whose value may seem small for a country the size of China, but they constitute a large part of the debt structures of those countries, which places those countries at the mercy of China, which seizes assets and concession rights to natural resources, in addition, of course, to implementing projects on The hand of Chinese companies and Chinese workers in those countries on the one hand, or these countries are used as political pressure tools to serve China’s expansionist goals on the other hand.