Question 1

1. What is China Debt Trap

Accepted Answer

While the The Belt and Road project has garnered varied but sparse praises from heads of state, ministers, and pundits claiming that their respective countries are already reaping the advantages of B.R.I., the criticism has ultimately assembled into a single term: the China Debt Trap.

Question 2

2. What Is the Chinese Economic Structure?

Accepted Answer

1. Reports suggest that the Chinese economy will slow down in 2022. In 2021, the real G.D.P. growth of the country reached 8.0%, and it moderated to 5.1% by the beginning of 2022. This slow-down reflects very little support from the exports and de-leveraging efforts of the government.n2. There has been an increase in the downside risk to China's economic outlook. Renewed cases of COVID-19 have disrupted economic activity to a great extent. A prolonged and severe downturn in the property sector of China poses another risk that could affect the economy on an extensive level.nProper structural reforms can help with the rebalancing act of the economy of China. Mutually reinforcing policy options can help China mitigate the trade-offs and accelerate the transformation to top quality growth.

Question 3

3. Why Are Developing Countries Taking Loans from China?

Accepted Answer

1. One of the primary reasons the developing countries are falling prey to China's debt trap is that instead of evaluating a country's creditworthiness, China is all too happy to lend money to them. China does not consider that new loans could saddle these countries with a burdensome debt crisis.n2. At about 4%, the loans from China are very close to the commercial market rates. They are four times the typical number of loans from any country or the World Bank. Despite such enormous interest rates, the developing nations are borrowing from 3. China because the loan repayment period is shorter.nAnother reason for the developing nations to borrow money from China is that the state-owned lenders in China require the borrowers to maintain a minimum cash balance in their offshore accounts to which the lenders have access.

Question 4

4. What Does the World Bank Have to Say About China's Loan Giving Plan?

Accepted Answer

According to the World Bank, China should improve its lending practices and maintain transparency in its loans, especially in developing nations. The World Bank also says that it is working with China closely to motivate more openness in lending to the developing countries.

Table of Contents

China Debt Trap, Belt and Road Project and Mental Health: What You Need To Know About it