Shylock's grip: A spotlight on Chinese debt bondage – dtnext

To be sure, since the start of the made-in-China Covid-19 pandemic, China's overseas lending for infrastructure projects has been on the decline (until 2019, it was rising sharply).

This is partly because the pandemic left partner countries in dire economic straits, though growing international criticism of China's predatory lending has likely also contributed.

One might hope that this downward trend augurs the end of colonial-style lending by China. But the decline has been offset by an increase in bailout lending, mostly to BRI partner countries – including Kenya – which were already weighed down by debts owed to China.

The scale of the bailout lending is massive.

The top three borrowers alone – Argentina, Pakistan, and Sri Lanka – have received $32.8 billion in rescue lending from China since 2017.

Pakistan has been the biggest borrower by far, receiving a staggering $21.9 billion in Chinese emergency lending since 2018.

This highlights the self-reinforcing debt spiral into which China thrusts countries.

Because China, unlike the IMF, does not attach stringent conditions to its loans, countries simply borrow more to service outstanding debts, thus sinking ever deeper into debt.