Shanghai, China has spent billions of dollars in many major projects in Asia, Eastern Europe and Africa over the past 5 years. China did this to make a big global impact. But now China has started pulling their hands. The deal by Chinese companies is under its big global plan ‘Belt and Road Initiative’. Chinese companies have issued a cosmonaut note and said that before giving loans to Chinese institutions, it should be careful and find out whether the loan will be able to get back or not.
Hu Xiaolian, chairman of Export-Import Bank of China, said that there is a lot of instability in the current international situation and with the possibility of losses, interest rates are also changing rapidly. He said that Chinese companies and belt and road initiatives may have to face financial difficulties.
China has asked the agencies to know how many deals have been done, which country has been with and on which financial term. America and Europe have long been concerned that Belt and Road China has a plan to grab economic power. The Chinese government is spending big money in it.
Under this initiative, the lender, controlled by the Chinese government, lends to other countries to make projects such as highways, rail and power plants. This loan is given on the condition that the work of planning and construction will be given to Chinese companies. In this way these companies do business.
At present, China’s economy is slowing down. Due to the trade war with the US, it is facing the problem of domestic debt. Now most activities will be under Belt and Road Initiative. Lending too much can also ruin the relationship with many countries. New governments of Malaysia and Sri Lanka have also asked why so much debt is being taken from China.
Belt and road activity is more successful according to China’s official figures. In 2018, Chinese companies signed contracts of $ 36.2 billion. The belt and road project started in 2013 under the leadership of President Xi is more successful. Under this, long-term loans are given. China also wants to lend to countries where natural resources are high. If there is no loan back then China can exploit resources.
The slow and slow speed of the bucket and road may also be due to the fact that many companies are completing projects and new deals are being signed. Given the suspicion of belt and road project, many institutions said that developing countries are not given much credit.