China: “neither predator nor friend” is the interesting title of this article in Les Echos.
“In terms of lending to emerging countries, China is” neither predatory nor friend “, judges a study cited by” The Economist “.
What is the connection between the metro in Buenos Aires, digital television in the Democratic Republic of Congo, thermal energy in Kyrgyzstan, turboprop planes in Vanuatu, the port of Freetown in Sierra Leone? All have benefited from loans from China.
Many observers have accused Beijing of financing these countries to pledge assets like ports or mines. To which China responds that it is aid to the poorest countries while other lenders are reluctant to commit.
However, writes “The Economist”, to get an idea on this question is complex, because the terms and conditions of most Chinese loans are confidential “.
A research team, including the Aiddata center, has nevertheless updated the clauses of around 100 loan and guarantee agreements in 24 developing countries, the vast majority of which have been granted by Eximbank and the Bank. development of China.
According to these clauses, the interest rates are not higher (from 0.5% to 4.5% above the Libor) than those charged by other institutions. These loans are also not intended to make China “a predator”. In 99 out of 100 cases, China does not require the borrower to pledge a physical asset, with the possible exception of a loan in Sierra Leone which mentions “equipment and other assets”.
In reality the limit of this study is quite simple.
It is a question of approach.
It’s not about whether China is imposing terrifying clauses on its partners.
The reason is simple.
If China did this, it would be totally counterproductive to its own interests.
Let’s not be naive.
You impose terrifying clauses when you are at the top and in a leadership position. This is the case of the United States with fines imposed on all countries, or on companies that do not trade as the United States wishes.
China is not there.
China is therefore flexible.
It finances, it sells its products, develops its partnerships.
But make no mistake about it, when it has supplanted the United States, which is its objective.
When the Yuan has replaced the dollar.
When the Chinese aircraft carriers sail the seas, then China will do the same as the United States and impose its law including by force.
This is why sovereignty and independence are two concepts that must always remain at the center of our political and geopolitical concerns.
Charles SANNAT
“This is a ‘presslib’ article, that is to say free of reproduction in whole or in part provided that this paragraph is reproduced after it. Insolentiae.com is the site on which Charles Sannat speaks daily and delivers a cheeky and uncompromising analysis of economic news. Thanks for visiting my site. You can subscribe to the daily newsletter free of charge at www.insolentiae.com. “
Source Les Echos.fr here
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