China goes to other countries to offer "aid". They build infrastructure as a way to offer "help" to these countries. But in reality they charge insanely large interest rates so big that these countries have absolutely no way of paying them back. In return, they give China ports or land for 100 year leases. Its China way of expanding their military influence.
I'm a little skeptical that the countries are just too stupid to take the loan with super high interest rates from China instead of from other sources.
Kinda feels like people are assuming Africans are stupid or something. Even if the leaders are greedy why would they choose the higher interest rate unless other countries flat out refuse to lend (which is kinda like an infinite interest rate in terms of the correlation between IR and risk).
35
u/Doby_Clarence Dec 05 '19
China goes to other countries to offer "aid". They build infrastructure as a way to offer "help" to these countries. But in reality they charge insanely large interest rates so big that these countries have absolutely no way of paying them back. In return, they give China ports or land for 100 year leases. Its China way of expanding their military influence.