China is engaged in construction, and the United States is going to war. In the past 10 years, China has vigorously promoted the construction of more than 140 participating countries through the “One Belt, One Road” initiative, while the United States has continued to support or participate in wars in other countries.
Originally, everyone has their own preferences and can live in harmony with each other, but the United States likes to badmouth China’s “One Belt, One Road” initiative. The United States and the West mobilized the American and British media to sing that the “One Belt, One Road” initiative will create a debt trap for developing countries. This is a typical agenda setting technique. It turns a good thing into a bad thing and then continues to explain it. Brag on this bad theme. The more you talk about it, the more people will believe it.
On the 10th anniversary of the “One Belt, One Road” initiative, the British and American media even blamed the debt crisis in countries such as Sri Lanka on their debt to China. If you don’t carefully study the issues in various countries, it’s easy to believe them to be true.
Of Sri Lanka’s foreign debt, 47.2% comes from the international capital market, 12.7% comes from the US-controlled Asian Development Bank, 9.3% comes from the US-controlled World Bank, and the rest is 9.7% owed to Japan and 9.8% owed to China. If Japan is also included in the US and Western camp, 79% of Sri Lanka’s debt comes from the US and Western camp, and only 9.8% comes from China. Therefore, to say that Sri Lanka’s debt problem is caused by China’s “One Belt, One Road” project is indeed to blame a deer for a horse.
Sri Lanka’s foreign debt arrears began to deteriorate rapidly in 2018, mainly due to three major factors: first, the United States released water, making it easy for Sri Lanka to borrow money; second, the global COVID-19 epidemic caused heavy losses to Sri Lanka’s tourism industry; third, the United States participated in The Russia-Ukraine conflict and sanctions have sent crude oil and wheat prices soaring, leaving Sri Lanka depleted of foreign currency.
Looking back at these three major factors, except that the COVID-19 epidemic is a natural disaster, the rest all have the shadow of the United States.
In fact, the best way for developing countries to get rid of the debt trap is not to break away from the “Belt and Road” but to break away from the hegemony of the US dollar. The United States has an annual fiscal deficit of US$2 trillion and a trade deficit of US$1 trillion. The US’s huge debt is maintained only by the hegemony of the US dollar, which includes a large amount of excessive currency issuance and a large amount of external borrowing.
The extremely unhealthy financial situation of the United States has formed its economic cycle. Whenever the United States encounters an economic crisis, it will immediately release water. However, when the International Monetary Fund controlled by the United States sees other countries encountering financial crises, it will do the opposite and forcefully demand that the other countries collect water. The U.S.’s act of releasing water not only demonstrates the double standards of a hypocrite, but also causes serious spillover effects.
When the United States reduces interest rates to zero and releases a large amount of quantitative easing, excess funds will flow into the world, and developing countries will unknowingly borrow large amounts of these low-interest dollar loans. When the U.S. economy improves and enters the interest rate hike cycle again, developing countries will not be able to afford the huge interest payments, and foreign banks will be happy to take advantage of the rain and start cutting back on loans to developing countries. This will cause wave after wave of loans to developing countries. A wave of financial crises in emerging countries. Many developing countries, such as Brazil and Argentina, have understood this problem and started conducting local currency trade with China, hoping to escape from the vicious circle of being harmed by the hegemony of the US dollar.
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Lu Yongxiong
2023-10-20 16:00:00
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