The days of China easily handing out billions of dollars to build infrastructure in developing countries around the world are now over. The Chinese can't afford it anymore and many of the borrowing countries just don't have the capacity to take on more debt.
But that doesn't mean the Chinese aren't lending anymore. They are. It's just that the projects they finance today are either small -- below $50 million -- or "beautiful" -- support local communities and align with certain Chinese political objectives.
Edwin Li, a Beijing-based project finance attorney for the international law firm Dentons, detailed these new lending priorities in a recent article and joins Eric & Cobus to explain why it's critical that borrowing countries clearly understand what China does and doesn't fund.
SHOW NOTES:
- China ODI Project Finance and Law: How to Define “Xiao Er Mei” (Small or Beautiful) in the Belt and Road Initiative by Edwin Li: https://bit.ly/3MTxde2)
- Boston University Global Development Policy Center: “Small is Beautiful”: A New Era in China’s Overseas Development Finance? by Rebecca Ray: https://bit.ly/3Hnm8iL)
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