- Reaction score
- 35
- Points
- 560
Outside of the economic turmoil in China now that the property and real estate market is seeing massive defaults (a second company has defaulted), Chinese debt diplomacy may also cause economic problems.
The Chinese expended huge amounts of money to build these "string of pearls" ports/naval bases, and have become the de facto owners, but the ports themselves don't make any money, and how long will nations like Siri Lanka continue to pour money into repaying loans (often for the benefit of corrupt local elites)? Third World nations nationalized (expropriated) lots of corporate property in the past, and there is no reason they couldn't do the same to China. It's not like the Chinese can take the port home with them:
So there may be another shock or series of shocks as poor nations stop filling Chinese coffers - cutting off another flow of funds.
The Chinese expended huge amounts of money to build these "string of pearls" ports/naval bases, and have become the de facto owners, but the ports themselves don't make any money, and how long will nations like Siri Lanka continue to pour money into repaying loans (often for the benefit of corrupt local elites)? Third World nations nationalized (expropriated) lots of corporate property in the past, and there is no reason they couldn't do the same to China. It's not like the Chinese can take the port home with them:
ZeroHedge
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com
ZeroHedge
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com
The story of Hambantota Port: a flunking token of political corruption
In just seven years, Sri Lanka’s Port of Hambantota went from a bastion of hope to a dead weight that turned the developing economy into China’s debtor.
www.ship-technology.com
So there may be another shock or series of shocks as poor nations stop filling Chinese coffers - cutting off another flow of funds.