FINE PRINT. China is sabotaging some international credit cooperation but not in the way typically feared. An analysis of 100 of the country&rsquos loans to poor countries over the last two decades by U.S. research outfit AidData undermines arguments that Beijing ensnares them...
HONG KONG (Reuters Breakingviews) - FINE PRINT. China is sabotaging some international credit cooperation but not in the way typically feared. An analysis of 100 of the country&rsquos loans to poor countries over the last two decades by U.S. research outfit AidData undermines arguments that Beijing ensnares them in so-called debt traps: It neither charged predatory rates nor demanded strategic assets like ports as collateral. And although the sample used reflects less than 5% of an estimated $900 billion of credit China has extended to developing countries the contractual fine print reinforces fears about China.
In addition to overly broad confidentiality clauses 75% of loans scrutinised were excluded from restructuring deals with the Paris Club group of developed-economy lenders. China Development Bank often demands that if borrowers take action deemed adverse to any Chinese entity it triggers a default. For wealthy nations seeking to arrange debt relief the AidData findings ultimately raise as many trust issues as they resolve. (By Pete Sweeney)
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