Chinese dragon grips 150 countries : 94 lakh crore loan due from poor and vulnerable countries

(GDP is Gross Domestic Product i.e. whole production of a country)

Beijing (China) – China has become the biggest country in the world to recover loans. As per ‘Lowy Institute’, an Australian Think Tank, China will recover about Rs 3 lakh crores from developing countries in 2025. Among this, 75 most poor countries will repay about Rs 2 lakh crores to China. The total loan given by China to developing countries is Rs 94 lakh crores while the loan amount owed by 42 countries to China is more than 10% of the GDP of those countries. Health and education fields in these countries are in danger due to China’s pressure.

If the countries are unable to repay the loan, there are strict conditions stipulated by China of mortgaging the natural resources or properties to China. Sri Lanka, Venezuela and Angola are among these countries. These countries are repaying their loan to China by using their resources instead of using them for their own development.

China’s grip through loans  

1. Developing countries are struggling to manage repayment of loan

2. The aggressive strategy of extending loans started with the ‘Belt and Road Initiative (BRI)’ project launched by China under President Xi Jinping from 2013 for global infrastructure development to boost global trade and GDP especially of developing countries. BRI involves investing in roads, railways, ports and energy projects in over 150 countries that hold 40% share of the global GDP.

3. In 2017, China became the largest lender in the world surpassing even the World Bank and International Monetary Fund.

4. There are 53 countries that have been extended the highest loans by China

Chinese loan has broken financial backbones of countries

1. Till 2022,  60% of the loans extended by China were given to countries facing economic problems. In 2010, the number was only 5%. The interest rate charged by China is 4.2 -6% while the rate is only 1.1% for the aid extended by the financial aid and development organisation. Many countries find it difficult to repay loans to China due to its higher interest rate.

2.Pakistan : In 2024, China invested Rs 17,000 crores in Pakistan and even extended the repayment period of the loan.

3. Angola : In March 2024, China agreed for reduction in monthly dues payable by Angola, an African country.

4. Sri Lanka : In 2022, Sri Lanka could not repay the loan and became a defaulter; therefore, it had to give its Hambantota port to China on rent for 99 years.

5. Zambia : In 2020, Zambia couldn’t repay the loan and talks are going on for rescheduling the repayment.

6. Laos : This country is under financial strain and its loan has exceeded its GDP.

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