China is facing a “debt crisis” in developing nations.

jira13578 · **Joined:** Mon Jun 28, 2021 10:55 am **Posts:** 360

The global situation both inSLOTXOterms of geopolitics and economics at this time is full of negative factors. The economy of the world is at risk of a “recession”, inflation is soaring. As a result, interest rates have to be increased accordingly.

This situation has a profound effect on developing countries. Inflation makes things expensive. The cost of living in the country is soaring. Rising interest rates in developed nations has resulted in capital outflows. The currency continued to decline. The outstanding liabilities automatically increase. while the ability to pay debts has dropped drastically

The current situation is extremely risky for developing nations. especially countries with very high foreign debt Because eventually it will reach the point where the ability to pay off debt is completely exhausted. Default will occur as a result.

If such an event occurs Not only affect the debtor country. but also shaken to the nation "Creditors" can't help

What economists are watching the most at this time is that How will one of the world's largest creditors in the past 10 years, China, deal with this brewing crisis?

China's lending to countries has been very high over the past decade, according to the Belt and Road Initiative (BRI), China's biggest foreign policy "stake" in China. over 100 years

One of the largest international infrastructure projects the world has ever seen. encountered quite a few problems Because many projects do not produce the expected commercial returns. While the large loans each country borrows from China put heavy financial pressure on their governments, they become fragile. More and more risk of collapse

A concrete example is the situation with Sri Lanka that had to default on its debt last May. becoming the first Asia-Pacific nation in more than 20 years to do so.

american data Enterprise Institute Check the loan status according to the BRI project. The program, which started in 2013, found that by the end of 2021, loans made by China to dozens of developing countries through the program. total up to 838 billion dollars

That is particularly problematic. The huge amount of such loans is now "bad debt." Data compiled by the Rhodium Group, a research institute in New York City, shows that between 2020 and 2021, China will need to open negotiations to compromise or negotiate terms. Debt settlements with national debtors totaled up to $52 billion, which was $16 billion, more than three times more than in the previous two years.

susananey67892 · **Joined:** Fri Jul 29, 2022 9:03 pm **Posts:** 57

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China is facing a “debt crisis” in developing nations.

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