In the News

Development Economics: Is China burdening low income countries with unsustainable debt?

Graham Watson

7th January 2022

This is a fascinating article that looks at the extent to which Chinese lending to developing economies is a tool to increase its geopolitical influence.

Of course, there's an irony that former imperial powers, and a former superpower are so upset by this, having spent much of the previous three centuries doing exactly the same, or something akin to this.

However, the expansion of Chinese lending, and the indebtedness of these countries has increased fourfold since 2010, and for certain economies, such as Sri Lanka. Chinese debt to Sri Lanka is equivalent to 10% of their GDP, and for some it's even higher. China tends to lend at higher rates of interest than western governments, close to commercial market rates and four times that of a typical World Bank loan.

Indeed, my summary doesn't do the article justice - just read it.

External Debt Relief - Exam Question Walkthrough I Edexcel A-Level Economics

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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