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11. Comparing the Perceptions of Indonesians and Malaysians toward the China’s Belt and Road Initiative: Facts and Trends

Author:
Yasmi Adriansyah and Yin Shi Wu
Publication Date:
05-2020
Content Type:
Journal Article
Journal:
Revista UNISCI/UNISCI Journal
Institution:
Unidad de investigación sobre seguridad y cooperación (UNISCI)
Abstract:
This article examines public perceptions in Indonesia and Malaysia regarding the China’s Belt and Road Initiative (BRI). In order to get a comprehensive picture of the subject matter, the article applies three perspectives, namely International Politics, Economy and Debt Trap, and Public Acceptance. The attachments of Indonesia (under Joko Widodo administration) and Malaysia (under Najib Razak administration) are analyzed, mainly by observing the perceptions of the political elites and opinion polls in these most populous Muslim countries. The findings show that both governments in the two countries had exhibited high inclination toward the BRI. Interestingly, their public show different attitudes and many people are against or at least critical of these policies. It therefore suggests that the pro-BRI policies of the governemnts must be managed with high care in order to balance the different interrests with the popular interests.
Topic:
Foreign Policy, Debt, and Belt and Road Initiative (BRI)
Political Geography:
China, Indonesia, and Malaysia

12. The Costs of Covid: Australia’s Economic Prospects in a Wounded World

Author:
John Edwards
Publication Date:
08-2020
Content Type:
Commentary and Analysis
Institution:
Lowy Institute for International Policy
Abstract:
Despite Victoria’s second wave of infection, Australia’s economic recovery from the coronavirus is underway. The bitter aftermath includes high and rising unemployment, vastly increased government debt, and a markedly less congenial global economy. Though formidable, the fiscal challenge is well within Australia’s means, especially if the Reserve Bank remains willing to acquire and hold Australian government debt. It may need to do so anyway to suppress an unwelcome appreciation of the Australian dollar in a world where major central banks are committed to low long term interest rates. Australia’s increasing integration into the East Asia economic community offsets the drag from the major advanced economies, but the US–China quarrel and the dislocation of global trading and investment relationships it threatens heightens the tension between Australia’s economic and security choices.
Topic:
Debt, Economy, Fiscal Policy, Unemployment, and COVID-19
Political Geography:
China, Asia, Australia, North America, Asia-Pacific, and United States of America

13. China is Not Conducting Debt Trap Diplomacy in the Pacific--At Least Not Yet

Author:
Jonathan Pryke
Publication Date:
03-2020
Content Type:
Commentary and Analysis
Institution:
East-West Center
Abstract:
In an atmosphere of heightened geostrategic competition, China’s Belt and Road Initiative (BRI) has raised questions about the risk of debt problems in less-developed countries. Such risks are especially worrying for the small and fragile economies of the Pacific. A close look at the evidence suggests that China has not been engaged in debt-trap diplomacy in the Pacific, at least not so far. Nonetheless, if future Chinese lending continues on a business-as-usual basis, serious problems of debt sustainability will arise, and concerns about quality and corruption are valid.There have been recent signs that both China and Pacific Island governments recognize the need for reform. China needs to adopt formal lending rules similar to those of the multilateral development banks, providing more favorable terms to countries at greater risk of debt distress. Alternative approaches might include replacing or partially replacing EXIM loans with the interest-free loans and grants that the Chinese Ministry of Commerce already provides.
Topic:
Debt, Development, Diplomacy, Geopolitics, and Belt and Road Initiative (BRI)
Political Geography:
China, Asia, and Asia-Pacific

14. Mind the Trap: What Basing Rights in Djibouti and Sri Lanka Reveal About the Limitations of Debt as a Tool of Chinese Military Expansion

Author:
Scott Wingo
Publication Date:
04-2020
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
On November 24, 2019, Sri Lankan President Gotabaya Rajapaksa told reporters during his first interview as president that he hoped to renegotiate the terms of the deal that gave a Chinese firm a 99-year lease over the Hambantota Port (Strategic News International, November 24, 2019). The port had been handed over as Sri Lanka struggled to make loan payments on the loss-making Chinese-built facility—thereby leading to debates as to whether the People’s Republic of China (PRC) had set a “debt trap” by intentionally lending Sri Lanka more than it could afford to repay, in hopes of eventually foreclosing on the port (China Brief, January 5, 2019). The subtext was that with a leasehold in hand, the PRC could use the port as a naval installation geared toward patrolling Indian Ocean shipping lanes. As can be observed by the Sri Lankan government’s desire to renegotiate, this has not happened. To the contrary, Sri Lankan security policy has trended against China since the debt-equity swap occurred. A comparison with Djibouti, where the PRC has established its only overseas military base to date, illuminates how this came to pass. In both Djibouti and Sri Lanka, Beijing has used infrastructure loans as a means to entice political leaders to allow naval access. However, three factors led to very different outcomes: 1) the recipient countries’ inherent willingness to host a base; 2) the degree of political competition faced by recipient leaders; and 3) the degree to which recipient leaders can diversify toward different sources of funding to reduce overreliance on China.
Topic:
Debt, Imperialism, International Cooperation, Military Strategy, and Hegemony
Political Geography:
China and Asia

15. Ocean of Debt? Belt and Road and Debt Diplomacy in the Pacific

Author:
Roland Rajah, Alexandre Dayant, and Jonathan Pryke
Publication Date:
10-2019
Content Type:
Commentary and Analysis
Institution:
Lowy Institute for International Policy
Abstract:
China has not been engaged in debt trap diplomacy — at least not yet. China has not been the primary driver behind rising debt risks in the Pacific, although a continuation of business as usual would risk future debt problems in several countries. There is scope for a new Australian infrastructure financing facility to provide loans to the Pacific without causing debt problems, particularly as it has adopted key sustainable lending rules. Pacific nations have an opportunity to obtain more favourable financing from official development partners but care must be taken to avoid overly geopolitical aid.
Topic:
Debt, Development, Infrastructure, Geopolitics, Soft Power, and Belt and Road Initiative (BRI)
Political Geography:
China, Australia, and Asia-Pacific

16. China's Debt Dilemma: Deleveraging While Generating Growth

Author:
Yukon Huang and Canyon Bosler
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Much of the media coverage of China's economy suggests that the country is headed for a financial crisis. China's mountain of debt is decried, local government finances are labeled menacing, and a property bubble is called disastrous. But this picture is misleading. While China has serious debt problems, with prudent macroeconomic policies and productivity-enhancing structural reforms, the challenges should be manageable if underlying fiscal issues and growth-related reforms are addressed.
Topic:
Debt, Economics, and Reform
Political Geography:
China and East Asia

17. China and Sovereign Debt Restructuring

Author:
Hongying Wang
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
Centre for International Governance Innovation
Abstract:
More than a decade after it put forth the idea of the Sovereign Debt Restructuring Mechanism (SDRM) in the early 2000s, the International Monetary Fund (IMF) is again seeking to engage various stakeholders in a new round of discussions about improving sovereign debt restructuring. As a major international creditor, China is an important force to reckon with. So far, the Chinese government has said little publicly regarding the recent IMF reports on this issue. Chinese policy makers and analysts are supportive of the IMF's attempt to explore ways for earlier and more orderly debt restructuring, but they find the proposed reforms to be only marginally useful. From China's point of view, the most important question in debt management is how to prevent excessive borrowing and lending and reduce the likelihood of unsustainable debt. It sees discussions about the mechanisms of sovereign debt restructuring as having little effect on this question. As an international creditor, China's main concern has to do with safeguarding the value of its overseas assets from the detrimental effect of macroeconomic policies of Western countries, especially the United States. This is not an issue that can be addressed by improved debt restructuring mechanisms. China remains deeply concerned about the power imbalance between developed and developing countries in the international financial system. Going forward in the global dialogue over sovereign debt restructuring, China's priority will be to minimize international financial instability while protecting the development needs of developing countries.
Topic:
Debt and International Monetary Fund
Political Geography:
United States and China

18. China's Credit Boom: New Risks Require New Reforms

Author:
Nicholas Borst
Publication Date:
10-2013
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The Chinese financial system has undergone almost continuous reform since the dismantling in the 1980s of the Soviet- style system where only one state-controlled bank existed. Government efforts to create a financial system that adheres to international best practices of commercial lending accelerated in the 1990s (box 1). Reforms progressed quickly during this period, but they were accompanied by excessive credit growth and a massive increase in nonperforming loans, threatening the solvency of some banks and the financial stability of the entire economy. The risk of these weaknesses was dramatized by the 1997 Asian financial crisis, in which several nearby countries were crippled by plunging currency values, rising interest rates and difficulties servicing their foreign-held debts.
Topic:
Debt, Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
China

19. ARBITERS AMISS: THE FAILINGS AND SHORTCOMINGS OF INSTITUTIONS GOVERNING THE GLOBAL FINANCIAL SYSTEM

Author:
Paul Blustein
Publication Date:
10-2013
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
Myriad dangers beset the global economy. The US Federal Reserve is trying to curb its ultra-easy money policy, a delicate operation that could plunge the world into recession if done too abruptly. The euro zone might fall back into turmoil. Japan's experiment with “Abenomics”1 could go sour. China's banking system looks shaky. Emerging economies are suffering large scale withdrawals of foreign funds.
Topic:
Debt, Development, Economics, International Monetary Fund, Foreign Aid, Fragile/Failed State, and Financial Crisis
Political Geography:
China

20. EIU: Global outlook summary

Publication Date:
06-2012
Content Type:
Policy Brief
Institution:
Economist Intelligence Unit
Abstract:
The global economy remains in precarious shape. Europe's debt crisis rages on, and although the euro appears to have survived its most recent test in the form of the Greek election on June 17th, austerity and financial-market uncertainty are depressing economic activity in Europe and, by extension, in much of the rest of the world. The Economist Intelligence Unit continues to expect global GDP growth to slow in 2012, and while our forecasts for the G3 economies—the US, euro zone and China—are essentially unchanged this month, we have cut our projections for Brazil and India.
Topic:
Debt, Economics, International Trade and Finance, Markets, and Financial Crisis
Political Geography:
United States, China, Europe, India, and Brazil