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China Lending Slowing to Developing Countries, State-Owned Companies Less Influential

China Lending Slowing to Developing Countries, State-Owned Companies Less Influential

We recently have talked about and tabled audiovisual presentations that discuss China and its lending habits that some international investors have called aggressive or even debt traps that eventually become part of Chinese expansion goals. The point is that China does lend to developing nations then, after loan payment troubles set in, takes over the properties and in some cases builds what some say are future bases. For its part, China says that this is surely not the case. China is now rebalancing  its lending for several reasons that include a weaker domestic economy and of course the said lending practices or debt traps. Some developing countries have heavy debt burdens, so the system is now changing.

Over the past two years, 2017 and 2018, there has been a fall in infrastructure building in Asia`s more developed nations, and as a result, there has been concern of the fiscal impact on the host nations of major projects. Some experts are now saying that any reckless lending that took place in the past has now stopped. It is becoming obvious that China has its own internal affairs to focus on right now. 

Also note that the debt burdens have increased for state-owned infrastructure companies and thus, the amount of investment both domestically and internationally has faded. China is investing in fewer mega-projects that have been part growth in the region. As the same time, countries like Myanmar, Vietnam, Malaysia, Indonesia and others are now canceling or reducing the size of projects. 

Team Classiarius



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