The head of the U.S. Overseas Private Investment Corporation (OPIC) on Monday, said that China is saddling poor nations with unsustainable debt through large scale infrastructure projects that are not economically viable
Trump targeted Beijing in a trade war that has sent ripples through economies in the world comes following Washington's seek to ramp up development finance in the face of China's global ambitions.
China's President, Xi Jing Ping's 'Belt and Road' which was unveiled in 2013, aims to build an infrastructure network which will connect China by land and sea to South east Asia, Central Asia, the Middle East, Europe and Africa.
China pledged $126 Billion for the plan, which has been applauded by its supporters as a source of vital financing for partners starved of infrastructures in the developing world.
OPIC CEO, Ray Washburne warned that the Chinese strategy created a debt trap for many poor nations, he revealed this during an interview with Reuters in Johannesburg
He said, “Just look at any project in these countries and they’re overbuilding the size.We try to have countries realise that they’re indebting themselves to the Chinese.”
Mr Washburne is not the first to warn of growing debt connected to China's infrastructure projects. In April, Christine Lagarde, the International Monetary Fund Managing Director cautioned China's Belt and Road partners against considering the financing as 'a free lunch'.
In December, Sri Lanka formally handed over commercial activities in its main southern port, in the town of Hambantota to a Chinese company as part of a plan to convert $6 Billion of loans that Sri Lanka owes China into equity.
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