Hidden debt rising for partners of China’s BRI plan
The Hindu
42 countries now have debt exposure to China in excess of 10% of GDP
A new study has found under-reported debts to the tune of $385 billion in projects carried out in dozens of countries under China’s Belt and Road Initiative (BRI), with a rise in “hidden” debt on account of an increasing number of deals struck not directly between governments but structured through often opaque arrangements with a range of financing institutions.
The study by AidData, a development research lab at the College of William & Mary in the U.S., found that “Chinese debt burdens are substantially larger than research institutions, credit rating agencies, or intergovernmental organisations with surveillance responsibilities previously understood” and “42 countries now have levels of public debt exposure to China in excess of 10% of GDP.”
The total debt, the study added, was “systematically under-reported to the World Bank’s Debtor Reporting System (DRS) because, in many cases, central government institutions in LMICs [low and middle income countries] are not the primary borrowers responsible for repayment”.
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