The US and China, who are competing for influence over the developing world, are partnering to resolve a growing debt risk in emerging markets. Ironically, US politicians have accused China of laying debt traps in developing countries, where countries default on Chinese debt and are allegedly forced to yield assets to China.
In a speech to the Hudson Institute on October 4, 2018, then US vice president Mike Pence said, In fact, China uses so-called debt diplomacy to expand its influence. Today [it] is offering hundreds of billions of dollars in infrastructure loans to governments from Asia to Africa to Europe and even Latin America. Yet the terms of those loans are opaque at best, and the benefits invariably flow overwhelmingly to Beijin…
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