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New study uncovers China's massive hidden lending to poor countries
New report shows the extent of China's hidden power as the developing world's creditor.
- Over 50 developing countries' Chinese debt accounts for on average 15 percent of their individual GDP.
- New report shows that the majority of the world's developing country's debt to China is considered "hidden."
- China's loans for poor countries are primarily for crucial infrastructure.
China's overseas lending, which was virtually zero before the turn of the century — well, about $500 billion in 2000 — stands today, ostensibly, at around $5 trillion. Indeed, they are now the world's largest creditor, being twice as large as both the World Bank and the International Monetary Fund, combined.
As much of what China does is under a veiled curtain of secrecy, it's been difficult to track how all the money is flowing. A new comprehensive study though, by Sebastian Horn and Christoph Trebesch of the Kiel Institute for the World Economy, and Carmen Reinhart of Harvard University, has provided some new insights about China's official credit lending empire. What did the researchers discover? More than half of China's lending to developing countries is what they term "hidden" money — loans that haven't been reported to any of the international funds, such as the World Bank.
Indeed, economist and author of the report, Tresbesch, recently told Germany's Spiegel in an interview following the release of the study's findings, that compiling all of the information was like "a kind of economic archeology." Their information came from numerous financial world databases, along with some documents provided courtesy of the CIA.
It's no secret that China would like to keep this type of information occluded from the international scene. Opponents of China's secretive lending practices fear that Beijing is engaging in predatory debt diplomacy and using their worldwide Belt and Road Initiative to create a new kind of economic colonialism over Africa and other parts of the developing world.
China’s creditor strategy for economic growth
China is in a state of further economic evolution. Long gone are the days of being the world's impoverished manufacturer. With a thriving consumer market boosted at home, China is now flexing their influence over vast swathes of the world. One of their strategies is by becoming the world's most involved lender to poor countries.
This can be problematic for a number of reasons. Countries that take this deal, end up grossly indebting themselves to China's policies in a number of ways, both monetarily and culturally. An example on the extreme end of the spectrum is Djibouti, whose Chinese debt is equivalent to 70 percent of the country's GDP. On average, the top 50 of China's borrowers owe somewhere near 15 percent of their GDPs, which, still, on a global scale is quite a lot.
The authors also found that China has never officially disclosed any loans to Iran, Venezuela, or Zimbabwe, which on other records it's been shown that China is a major creditor. The report speculates that one of the ways to avoid these international cross-border crediting claims, is by the Chinese government disbursing loans straight to Chinese contractors rather than the developing governments themselves.
A great deal of these loans aren't subject to credit rating agencies, because most of China's foreign loans flow straight from their government. China's lending practices take on another interesting dynamic, as the country is lending much more than just money: it is also helping build crucial infrastructure in these developing nations. In doing so, China exports a healthy dose of its culture and influence.
Growing influence in Africa
China's investment in Africa takes the form of loans in exchange for infrastructure development. Oftentimes, Chinese companies and citizens reap the benefits and profits of these large projects. While many Africans welcome the much needed investment into their countries, it's not clear how much the continent is benefiting from this Chinese influence.
One major issue a lot of countries are facing is that almost the entirety of their country's debt load comes from China. For example, of Kenya's $50 billion in debt, more than 72 percent of it is from China. In Senegal, highways, industrial parks and other crucial developmental projects for a functioning country are all funded by large, risky Chinese loans. Again, much of this value goes back to China. They're not doing this for humanitarian reasons. The Chinese expect a capital and cultural return.
Tim Wegenast, who wrote a report about Chinese mining in Africa states:
"It's more or less safe to say that Chinese companies employ less local labor than other companies because they bring over many Chinese workers, and when they develop local infrastructure, they provide countries with loans which are being used to pay for it, which is then constructed by Chinese companies and Chinese labor."
A future of Chinese credit
According to The Economist, China's lending prowess is more of a mixed bag. While many new loans from China were offloaded with debt relief by Western creditors after defaulting, China has in the past put forth some debt restructuring plans on 140 of their foreign loans. Although at other times, they've taken their collateral with ruthless abandon, for example when they seized the Hambantota Port in Sri Lanka.
Many Chinese loans have higher extended interest rates and short maturities, with heavy collateral that includes commodities, or even important strategic foreign infrastructure.
The authors of the report note that China has started talking about being more transparent and sustainable on their loans in the future. But no clear evidence of this taking place has yet to materialize.
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Evolution doesn't clean up after itself very well.
- An evolutionary biologist got people swapping ideas about our lingering vestigia.
- Basically, this is the stuff that served some evolutionary purpose at some point, but now is kind of, well, extra.
- Here are the six traits that inaugurated the fun.
The plica semilunaris<img class="rm-lazyloadable-image rm-shortcode" type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xOTA5NjgwMS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY3NDg5NTg1NX0.kdBYMvaEzvCiJjcLEPgnjII_KVtT9RMEwJFuXB68D8Q/img.png?width=980" id="59914" width="429" height="350" data-rm-shortcode-id="b11e4be64c5e1f58bf4417d8548bedc7" data-rm-shortcode-name="rebelmouse-image" />
The human eye in alarming detail. Image source: Henry Gray / Wikimedia commons<p>At the inner corner of our eyes, closest to the nasal ridge, is that little pink thing, which is probably what most of us call it, called the caruncula. Next to it is the plica semilunairs, and it's what's left of a third eyelid that used to — ready for this? — blink horizontally. It's supposed to have offered protection for our eyes, and some birds, reptiles, and fish have such a thing.</p>
Palmaris longus<img class="rm-lazyloadable-image rm-shortcode" type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xOTA5NjgwNy9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMzQ1NjUwMn0.dVor41tO_NeLkGY9Tx46SwqhSVaA8HZQmQAp532xLxA/img.jpg?width=980" id="879be" width="1920" height="2560" data-rm-shortcode-id="4089a32ea9fbb1a0281db14332583ccd" data-rm-shortcode-name="rebelmouse-image" />
Palmaris longus muscle. Image source: Wikimedia commons<p> We don't have much need these days, at least most of us, to navigate from tree branch to tree branch. Still, about 86 percent of us still have the wrist muscle that used to help us do it. To see if you have it, place the back of you hand on a flat surface and touch your thumb to your pinkie. If you have a muscle that becomes visible in your wrist, that's the palmaris longus. If you don't, consider yourself more evolved (just joking).</p>
Darwin's tubercle<img class="rm-lazyloadable-image rm-shortcode" type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xOTA5NjgxMi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0ODUyNjA1MX0.8RuU-OSRf92wQpaPPJtvFreOVvicEwn39_jnbegiUOk/img.jpg?width=980" id="687a0" width="819" height="1072" data-rm-shortcode-id="ff5edf0a698e0681d11efde1d7872958" data-rm-shortcode-name="rebelmouse-image" />
Darwin's tubercle. Image source: Wikimedia commons<p> Yes, maybe the shell of you ear does feel like a dried apricot. Maybe not. But there's a ridge in that swirly structure that's a muscle which allowed us, at one point, to move our ears in the direction of interesting sounds. These days, we just turn our heads, but there it is.</p>
Goosebumps<img class="rm-lazyloadable-image rm-shortcode" type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xOTA5NzMxNC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyNzEyNTc2Nn0.aVMa5fsKgiabW5vkr7BOvm2pmNKbLJF_50bwvd4aRo4/img.jpg?width=980" id="d8420" width="1440" height="960" data-rm-shortcode-id="8827e55511c8c3aed8c36d21b6541dbd" data-rm-shortcode-name="rebelmouse-image" />
Goosebumps. Photo credit: Tyler Olson via Shutterstock<p>It's not entirely clear what purpose made goosebumps worth retaining evolutionarily, but there are two circumstances in which they appear: fear and cold. For fear, they may have been a way of making body hair stand up so we'd appear larger to predators, much the way a cat's tail puffs up — numerous creatures exaggerate their size when threatened. In the cold, they may have trapped additional heat for warmth.</p>
Tailbone<img class="rm-lazyloadable-image rm-shortcode" type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xOTA5NzMxNi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY3MzQwMjc3N30.nBGAfc_O9sgyK_lOUo_MHzP1vK-9kJpohLlj9ax1P8s/img.jpg?width=980" id="9a2f6" width="1440" height="1440" data-rm-shortcode-id="4fe28368d2ed6a91a4c928d4254cc02a" data-rm-shortcode-name="rebelmouse-image" />
Image source: Decade3d-anatomy online via Shutterstock<p>Way back, we had tails that probably helped us balance upright, and was useful moving through trees. We still have the stump of one when we're embryos, from 4–6 weeks, and then the body mostly dissolves it during Weeks 6–8. What's left is the coccyx.</p>
The palmar grasp reflex<img class="rm-lazyloadable-image rm-shortcode" type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xOTA5NzMyMC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzNjY0MDY5NX0.OSwReKLmNZkbAS12-AvRaxgCM7zyukjQUaG4vmhxTtM/img.jpg?width=980" id="8804c" width="1440" height="960" data-rm-shortcode-id="67542ee1c5a85807b0a7e63399e44575" data-rm-shortcode-name="rebelmouse-image" />
Palmar reflex activated! Photo credit: Raul Luna on Flickr<p> You've probably seen how non-human primate babies grab onto their parents' hands to be carried around. We used to do this, too. So still, if you touch your finger to a baby's palm, or if you touch the sole of their foot, the palmar grasp reflex will cause the hand or foot to try and close around your finger.</p>
Other people's suggestions<p>Amir's followers dove right in, offering both cool and questionable additions to her list. </p>
Fangs?<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">Lower mouth plate behind your teeth. Some have protruding bone under the skin which is a throw back to large fangs. Almost like an upsidedown Sabre Tooth.</p>— neil crud (@neilcrud66) <a href="https://twitter.com/neilcrud66/status/1085606005000601600?ref_src=twsrc%5Etfw">January 16, 2019</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Hiccups<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">Sure: <a href="https://t.co/DjMZB1XidG">https://t.co/DjMZB1XidG</a></p>— Stephen Roughley (@SteBobRoughley) <a href="https://twitter.com/SteBobRoughley/status/1085529239556968448?ref_src=twsrc%5Etfw">January 16, 2019</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Hypnic jerk as you fall asleep<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">What about when you “jump” just as you’re drifting off to sleep, I heard that was a reflex to prevent falling from heights.</p>— Bann face (@thebanns) <a href="https://twitter.com/thebanns/status/1085554171879788545?ref_src=twsrc%5Etfw">January 16, 2019</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> <p> This thing, often called the "alpha jerk" as you drop into alpha sleep, is properly called the hypnic jerk,. It may actually be a carryover from our arboreal days. The <a href="https://www.livescience.com/39225-why-people-twitch-falling-asleep.html" target="_blank" data-vivaldi-spatnav-clickable="1">hypothesis</a> is that you suddenly jerk awake to avoid falling out of your tree.</p>
Nails screeching on a blackboard response?<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">Everyone hate the sound of fingernails on a blackboard. It's _speculated_ that this is a vestigial wiring in our head, because the sound is similar to the shrill warning call of a chimp. <a href="https://t.co/ReyZBy6XNN">https://t.co/ReyZBy6XNN</a></p>— Pet Rock (@eclogiter) <a href="https://twitter.com/eclogiter/status/1085587006258888706?ref_src=twsrc%5Etfw">January 16, 2019</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Ear hair<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">Ok what is Hair in the ears for? I think cuz as we get older it filters out the BS.</p>— Sarah21 (@mimix3) <a href="https://twitter.com/mimix3/status/1085684393593561088?ref_src=twsrc%5Etfw">January 16, 2019</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Nervous laughter<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">You may be onto something. Tooth-bearing with the jaw clenched is generally recognized as a signal of submission or non-threatening in primates. Involuntary smiling or laughing in tense situations might have signaled that you weren’t a threat.</p>— Jager Tusk (@JagerTusk) <a href="https://twitter.com/JagerTusk/status/1085316201104912384?ref_src=twsrc%5Etfw">January 15, 2019</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Um, yipes.<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">Sometimes it feels like my big toe should be on the side of my foot, was that ever a thing?</p>— B033? K@($ (@whimbrel17) <a href="https://twitter.com/whimbrel17/status/1085559016011563009?ref_src=twsrc%5Etfw">January 16, 2019</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Are we enslaved by the finer things in life?
- The Roman writer, Tacitus, argued that the Roman Empire was built by enslaving conquered people who became accustomed to fine living and luxury.
- Technology today has become so essential to our daily lives that it seems impossible to break free of it. It's as much a cage as a luxury.
- Being dependent on a thing gives it power over you. To need something or someone is, for better or worse, to limit yourself.
- There was a massive die-off of marine life 359 million years ago, and nobody knows why.
- A new study proposes that the Late Devonian extinction may have been caused by one or more nearby supernovae.
- The supernova hypothesis could be confirmed if scientists can find "the green bananas of the isotope world" in the geologic record.
Fifty years of research on children's toy preferences shows that kids generally prefer toys oriented toward their own gender.