Fact-checking critics of Chinese aid

Fact-checking critics of Chinese aid

Fact-checking critics of Chinese aid by Alvin Camba, John Hopkins University http://www.eastasiaforum.org Pundits and journalists have often argued that Chinese loans are expensive and harmful to recipient countries. But they fundamentally misunderstand how Chinese aid and investment works across different countries. Criticisms of Chinese aid suffer from four crucial problems. First, Chinese interest rates have been higher than comparable loans from other OECD Development Assistance Committee (DAC) countries because China lends to states with low investment grades . Interest rates vary across different donors but loan parameters depend on the recipient country’s investment grade and the donor state’s funding program . Put simply, DAC interest rates could have also been higher had these states funded similar projects. Second, DAC countries follow one set of criteria for loa...

Full article: https://dinmerican.wordpress.com/2017/11/29/fact-checking...