China fell into a debt trap
China fell into a debt trap
China may go bankrupt and its economy may collapse, Billions of dollars evaporated at the moment, Debt paid to make China great again, But it went without the return of diplomatic relations. States will not pay. And the economy will not bear it. And Che and his comrades want a solution.
?Will we go bankrupt or will we remain stronger
?What about our internal problems
Beijing in is a major dilemma, Debt trap turned curse, The country of the dragon may go bankrupt with the rest of the bankrupt, An initiative that should have made glory for China, But it has making the dominoes collapse today.
China's debt, The curse of history
in the beginning have been launched from the Belt and Road Initiative, It is an initiative aimed at The establishment of a wide network of economic and trade crossings between China other countries, These crossings include roads and railways, ports, airports, commercial and technological areas.
China has been the announcement of the initiative for the first time in the year two thousand and thirteen by Chinese President Xi Jinping, Since then, many Mega projects under this initiative, Some of these include the projects to establish a railway linking China and Europe through Asia, Al-Wusta and Russia. and construction of the Meg Kong River Canal in Southeast Asia, And the establishment of ports of different countries such as Pakistan, Sri Lanka and Cameroon.
The initiative mainly aims to enhance economic cooperation between China and many countries of the world. Achieving economic integration and trade between the countries participating in the initiative.
It is considered part of broader strategy through which China seeks to expand its the economy in the region and around the world, Nevertheless, and despite the magnitude Project and Budget The Belt and Road has not been without criticism.
as some see it being used as a way to extend China's political and economic launch of the participating countries, It represents a threat to the national sovereignty and strategic interests of those countries. Some real estate reports, some projects funded by China within the Belt Initiative the Road, Not done successfully, That initiative includes billions of dollars in loans, dollars for many developing countries. Which increases the risk of debt exposure.
Among the countries that suffer from major problems in paying their debts China within the Belt and Road Initiative, which are Sri Lanka, Pakistan, Malaysia and is the Maldives.
Sri Lanka began to receive loans from China before the the initiative officially, specifically in the year two thousand and five, Received significant later were announced for the establishment of various projects, them from Wuhamban Tota and Mattala Airport, Yet the debt is the accumulated has led to severe budget deficit, Which prompted the government to move negotiating with China to postpone the payment of its debts, In the end and specifically in the year two thousand and seventeen, Sri Lanka agreed to sell a share of seventy percent of the port of Hamban Tota to a Chinese company to pay off some debts.
Pakistan's situation was no less bad than that of Sri Lanka, It got worth sixty-two billion from China to set up projects, Including the Gwadar port, the Sewal power station, and a railway line from Karachi to Lahar, But due to the economic slowdown, it suffers from the sharp loans in the budget, To pay off the debts, the government negotiated Pakistan with China to postpone the payment of interest on loans.
Among the countries that joined this initiative, Malaysia and the islands, like the rest, Malaysia and the Maldives faced difficulties in paying their debts, to China within this initiative, Malaysia's debts from China have increased significantly to in recent years, Loans worth more than eight billion dollars twenty-two billion US dollars, which was used financing infrastructure projects, And there have been growing fears that these will be excessive debt influence, As some of the infrastructure projects that have been funded in Malaysia is suffering from low revenues, Malaysia needs to pay off its debts of in US dollars, But Malaysia's currency fell by five then five percent in the year two thousand and eighteen, Which led to a rise in the cost of debt is considered.
As for the Maldives, It has been creating of a lot of tourism projects and other infrastructure projects on the islands, Which has been funded through Chinese debt by the nature case, However tourism revenues have decreased in the Maldives in recent years have been affected by several factors, on top of which is the Corona deficit, and then the Russian-Ukrainian war, Which led to a decline revenues and increase debt, Added to all these economic problems is the dealing with debt may affect between Malaysia and the Maldives, It may push China to make greater demands on economic pandemic.
?what will happen if it fails states to pay
But in the burning Chinese interior, what will happen if it fails states to pay?, The reality says that if countries fail to pay their debts, China's financing capacity, and this may cause a negative impact on the Chinese economy aspects, As China relies heavily on the proceeds of these loans in financing its economy and achieving its growth.
first and what will happen at home Chinese influence, non-payment of debts may lead to a reduction in for China, As Chinese banks and financial institutions will have difficulty in Collect amounts owed, Which affects its ability to finance projects, new support for economic growth.
Secondly, failure to pay debts may lead to that exacerbates the already exacerbated Chinese debt problem, That's where with one of the largest creditors in the world, And if you are unable to recover the debts, the amount owed by them, which will exacerbate this problem and load the Chinese economy more debt.
Thirdly, which is considered the most important of all of the above, The non-payment of debts may lead to negative confidence in the Chinese economy, This may cause the level of confidence of foreign investors.
All this comes at a time of China will wage a fierce economic war with the United States,the American effect. With several economic crises at home, on top of which is a market, In addition to that, the tension with Taiwan, which may spark a war in any a moment drop, Which means, in the end, that the debt problem is getting worse day after day today, China may one day wake up to an economic catastrophe with its The biggest collapse in the history of the Dragon.