Warning issued as China to recall debt from 75 countries

[Yo_Mama_Been_Loggin]

China was the leading financier for developing nations throughout the 2010s, channeling over $1 trillion into infrastructure projects under President Xi Jinping's Belt and Road Initiative (BRI).

Yet as lending has tapered off and grace periods on many loans have expired, China has emerged as the world's largest official creditor, according to a new report from the Lowy Institute, an Australian foreign policy think tank.

Why It Matters

The BRI, signed on to by approximately 150 countries, has funded thousands of projects worldwide.

Some low-income nations took on more debt than they could repay, in some cases leading to Chinese state-owned enterprises taking control of strategic infrastructure—such as in 2017 when China Merchants Port Holdings famously gained control Sri Lanka's Hambantota Port on a 99-year lease.

Critics, including the United States government, have accused China of "debt-trap diplomacy," or leveraging these debts to gain control over critical infrastructure. China has consistently denied these allegations, saying its overseas lending is conducted on mutually beneficial terms.

https://www.msn.com/en-us/money/companies/warning-issued-as-china-to-recall-debt-from-75-countries/ar-AA1FHVli

How much of our debt do they own?

[TheProle]

1. "How much of our debt do they own?"

~750b

[bucolic_frolic]

2. AI says China owns ................

"China's share of U.S. debt varies, but as of November 2024, it held about 8.9% of the total U.S. debt held by foreign countries. This translates to roughly $768.6 billion in U.S. Treasury securities. While a significant amount, China is not the largest foreign holder of U.S. debt; that title belongs to Japan"

[BoRaGard]

3. That would be another GOP-engineered kick in the nads

GOP farts in everyone's face, then whines and pouts when there's blowback.

[Igel]

7. They buy Treasury bills regardless of which party's the nominal ruler.

But the difference is that they buy bonds and bills. They don't make loans that have infrastructure as collateral or which can be recalled.

When the bonds/bills mature, they're cashed in. That's about the limit of the demand their owners can impose on the US government. The only other thing they can do is (a) stop buying and (b) start selling, which would depress demand and increase the interest rate. It would also depress the value of their holdings, that ol' inverse relationship that usually holds between bond price and interest rate.

[ProfessorGAC]

4. A Pittance, Really

It's about $760 billion, or:
- 2% of total debt
- about 3% of our GDP.
Japan holds more US debt paper than China with a smaller GDP.
US private entities hold over a trillion dollars of China's gold-backed debt paper. (Which, BTW, they are currently in default on interest payments.) That's close to 5.6% of their GDP.
This article is painting a bad picture, and that's valid, but it's small countries that are being exploited.

[Johnny2X2X]

5. So they're going to sell US treasuries and tank bonds?

Not sure that would be smart.

[wiggs]

6. And we have never used loans and IMF to profit off of and take advantage of other countries? I read 'Confessions of

an Economic Hit Man' some time ago and it opened my eyes.