China Stakes Its Claim in Latin American Energy:

initiative, which obliges signatories to exclude purchasing Chinese systems and equipment (like Huawei) as they develop 5G mobile networks. Adam Boehler, the Development Finance Corp.’s CEO, told the FT that the agreement represents “‘a novel model’ to eject China from the Latin American nation.” The U.S. government expects to use the Ecuador agreement as a model, encouraging other countries to reduce their dependence on Chinese debt and exclude Chinese telecoms from their networks. According to figures from the Inter-American Dialogue and the Global China Initiative at Boston University’s Global Development Policy Center, as of 2019, loans made by the CDB and CHEXIM to LAC governments and SOE’s looked like the data in Figure 3. These loans cover energy and other sectors. They do not take into account the hidden debt described by the article presented below. In an article published last year by the Harvard Business Review ( How Much Money Does the World Owe China? ), the authors stated that 50% of China’s loans to developing countries are not reported and do not appear in the data banks of the World Bank, the IMF or credit-rating agencies. 51

The Chinese government and its subsidiaries, they said, have loaned about $1.5 trillion to more than 150 countries, making China “the world’s largest official creditor – surpassing traditional, official lenders such as the World Bank, the IMF or all OECD creditor governments combined.” What this means is that, in reality, debt owed by developing nations to China is greater than 5% of global GDP. Moreover, they said: “For the 50 main developing country recipients, we estimate that the average stock of debt owed to China has increased from less than 1% of debtor country GDP in 2005 to more than 15% in 2017.” Some of these countries (none in Latin America) owe at least 20% of their GDP to China. And China is owed money beyond the developing world. Adding other indebtedness known to the public, including the $1 trillion in U.S. Treasury debt held by China’s central bank and international trade credits, the total owed to China reaches $5 trillion, or more than 6% of world GDP as of 2017. What all this means is that governments and private financial institutions cannot properly assess a country’s real repayment burdens and financial risk, the article says. The private sector will misprice bonds and other debt instruments. Many Chinese official loans have

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