by Christine K. Caruzo, Breitbart:
China spent $240 billion between 2000 and 2021 to “rescue” 22 countries struggling to repay predatory Belt and Road Initiative (BRI) loans, according to a report published on Tuesday.
The report, titled “China as an International Lender of Last Resort,” was prepared by researchers from the World Bank, the Harvard Kennedy School, research lab AidData, and the Kiel Institute for the World Economy. The data show that, by 2021, China had undertaken 128 rescue loan operations spread across 22 countries with low foreign exchange reserve levels and weak sovereign credit ratings totaling $240 billion.
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According to the researchers, China’s bailout “rescue” packages are provided with the ultimate intention to rescue its own banks, noting that the borrowed Chinese money is not “cheap,” as it comes attached with a five-percent interest rate that is much higher than the International Monetary Fund (IMF)’s two-percent rate.
“Beijing is ultimately trying to rescue its own banks. That’s why it has gotten into the risky business of international bailout lending,” Carmen Reinhart, one of the study’s authors, said. “But if you are going to bail out a borrower that is in default or teetering on the edge of default, it’s important to have a clear understanding of whether you are trying to solve a short-term liquidity problem or a long-term solvency problem.”
Recipient countries of the Chinese bailout money are “almost exclusively” Belt and Road Initiative debtors. The Belt and Road Initiative is a global infrastructure plan in which China offers predatory “debt trap” loans to poor countries to be used in the construction of infrastructure.
The report noted that China’s spending on Belt and Road infrastructure projects has slowed significantly since 2016, as many projects have failed to yield expected dividends