Once it was “China is using the debt trap,” now it is “China is falling into a debt trap.” The Financial Times is relentless in finding ways of smearing the Belt and Road Initiative, without caring about consistency. Now, the scribblers of the City of London have discovered that BRI investments are concentrated in “high risk” countries. Were they to concentrate on the City of London they would find inestimably higher-risk investment.
In an article entitled “China Hit by Surge in Belt and Road Bad Loans,” the FT shows among others a chart by the OECD and the Green Finance and Development Center, with an impressive huge number of BRI countries in the “highest risk” category, with difficulties in repaying debt. (https://www.ft.com/content/da01c562-ad29-4c34-ae5e-a0aafddd377c)
With that, they have discovered hot water. It is known that the BRI concentrates on high-risk countries, because the latter are in Asia and Africa. But the BRI aim is exactly to invest where infrastructure is needed. Therefore it is natural that some projects meet difficulties and defaults or debt restructuring occur.
The FT's schadenfreude over China’s having extended loans to non-performing lenders is a marked departure from their years of claiming that saddling countries with unserviceable loans was China’s intended policy—the alleged “debt-trap.”
