China's New Silk Road”: billions in investments and massive mountains of debt

China's New Silk Road”: billions in investments and massive mountains of debt

According to a report by www.bild.de, China’s “New Silk Road” infrastructure project is associated with a total mountain of debt totaling $1.1 trillion for more than 150 participating countries. In the first decade of the initiative, Beijing gave this amount of loans to build bridges, ports and highways. The outstanding debt owed by borrowers in developing countries to China is therefore at least $1.1 trillion. These projects are intended to give China better access to other countries' markets.

As a financial expert, it is important to analyze what effects such a mountain of debt can have on the global market and the financial industry. Such high debt in developing countries to China could lead to destabilization of the affected countries. Insolvency and too much debt could lead to economic crises and dependency on China. This in turn would have an impact on global financial markets.

In addition, it is to be expected that criticism of the “New Silk Road” will continue to increase in view of this enormous debt burden. Critics criticize the opaque pricing of numerous infrastructure projects by Chinese companies and the damage to the environment caused by the project. Countries such as Malaysia and Myanmar have already tried to renegotiate contracts to reduce costs. This could lead to legal disputes and uncertainties in the financing of such projects.

Overall, it is essential to closely monitor and evaluate the effects of this high level of debt on developing countries, the global market and the financial sector in order to assess possible consequences and take appropriate measures to stabilize and secure them. Any further developments in this area will have to be closely monitored in order to ensure financial stability and the orderly functioning of international financial markets.