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Zero Hedge: Visualizing How Chinese Financing Is Fueling Megaprojects Around The World
On a mountaintop a few miles north of the bustling streets of Harare, Zimbabwe, a curving, modern complex is beginning to take shape. This building, once completed, will be the home of the African country’s parliament, and the centerpiece of a new section of the capital city.
Aside from the striking design, Visual Capitalist's Nick Routley notes that there’s another unique twist to this development - the entire $140 million project is a gift from Beijing. At first glance, gifting a country a new parliament building may seem extravagant, but the project is a tiny portion of China’s $270 billion in “diplomacy spending” since 2000.
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WNU Editor: China is expecting a return on these investments. The problem that I foresee is that it is going to take years for these countries to pay these debts off (if ever).
7 comments:
Economic Hit Man: https://www.youtube.com/watch?v=37Dvt2EqXF4
Sometimes debts can be paid off with something other than money.
called ownership
The only question is what will China do when some of these countries inevitably default and nationalize some of these Chinese investments. It's what these countries did to the West from 1960s onward.
If China thinks all these countries will meekly hand over their assets, they are being very naive.
Chris
In the 80s country (sovereign) debt became a serious issue. The solution involved trade offs. It works like this. If a country or entity within a country are holding international debt that is "being defaulted" and have diversified their lending to include other countries, often you can trade that purposely "defaulted debt" for similar holdings by others that they are going to lose but for which you can collect.
That assumes of course that they have the ability to collect the assumed debt from the debtor country. In such cases payoff can be achieved in the face of say possible denial of badly needed food, goods and/or services provided.
When the IMF and others broadcast the crippling country debt numbers they never provide the investment/loans made to other countries which in some cases could offset much of the debt owed.
Of course sometimes even countries have to take the hit.
"Sometimes debts can be paid off with something other than money."
Like resources. Resource (like copper, wheat, coffee, manganese, oil, pigs) are already trade everyday in lieu of money. All you do is put a dollar value or yuan value on the commodity and instead of X number yuan it is y number of pigs.
People in the affected country will still feel the effects and they will still be mad. So buck up buckaroo a loot of ire is coming your way.
'lot' not "loot"
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