China is pushing impoverished countries under the burden of borrowing

China has been accused by the West that its "lending policy" has trapped developing nations to such an extent that they are under pressure from China. Over the past decade, China has tripled its loans to middle- and low-income countries. China By 2020, China will have provided $170 billion in loans to countries across the globe. Not only are China's lending arrangements arbitrary, but there is a lack of transparency as well. Also, China lends at inflationary rates. China does not publicly disclose its loans abroad, and most of its agreements state that borrowing countries do not disclose information on the agreement. China keeps the terms of its agreements secret to prevent all sorts of controversy.

Nevertheless, China rejects these allegations. According to EdData, a research lab at the University of William and Mary in the United States, over half of China's debt to developing countries is not officially recorded. The government does not have it on its balance sheet. Often, China issues debt through state-owned enterprises or banks, rather than directly to governments. According to Add Data, China's debt to over 40 low- and middle-income countries, according to "hidden data," is around 10 per cent of their total GDP. These countries are poor, hungry for resources and easily submitted to Chinese pressure. At times, it becomes very difficult to borrow from international organizations. Whereas China lends easily, when it lends, the conditions are not just arbitrary, but also lack transparency. In addition, China provides loans at inflation rates. Poor countries sometimes sign such agreements, and China even helps them build infrastructure, but when it comes time to repay the loans, the countries find that there are many "hidden charges" in the loans and face difficulties in repaying them. Sometimes the Chinese are either seeking political support or leasing assets. In the process, China has prepared many nations not to recognize Taiwan. The debt of China towards Djibouti, Kyrgyzstan, Zambia and Laos is so high that it accounts for 20% of their total GDP. China's critics cite the port of Hambantota in Sri Lanka as the greatest example. The port was built with assistance from China, but due to the deteriorating economic situation and costly loans, Sri Lanka was not able to repay the loan. In return, China will rent the harbor for 99 years with the promise of new investments in the future.

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