COVID-19: Should China Forgive $5 Trillion Global Debt?
Because of COVID-19, does the buck stop with China? Should China forgive the $5+
trillion debt it is owed by the nations of the world? Who will bear the financial burden of
COVID-19 whose initial epicenter was Wuhan, China? Wuhan International Airport had
direct flights to 21 countries, including the U.S. that had a monthly average of 4,400
passengers in 2019.
My prayers and thoughts are with those infected and affected. May the Almighty God
comfort the families of those who have lost their loved ones. Questions that I ask and
probably many are asking are:
As a global citizen, why didn’t China sound an early alarm to warn the World Health
Organization (WHO) and other countries about until late in December 2019?
Why did Chinese authorities arrest and charge Dr. Li Wenliang and seven others with
“spreading rumors” when they sounded an early warning to the world of COVID-19?
Why did the Chinese health authorities in 2019 order a company to stop testing and
destroy large test samples from Wuhan after the test results indicated the existence of
this deadly disease? Dr. Li Wenliang died from COVID-19 in February 2020 and the
world doesn’t know yet the fate of the seven.
My international studies degree was focused on the Middle East and Asian countries
such as China and Japan. Below are the few facts that I learnt/know about China:
1. China aims to be a superpower. Seven centuries ago, China had the most advanced
economy and boasted of a professional navy. The U.S. overtook China’s economy and
military, but China has been working tirelessly to regain her position, that is, if it has not
yet accomplished this feat. By employing geo-economics strategies of influence, China
has grown to be a $14.3 trillion economy as of 2019.
2. When Obama visited Kenya and Ethiopia in 2015, the Beijing Times wrote Obama’s
Africa diplomacy policy was aimed at “…off-setting China’s growing influence and
recovering past U.S. leverage”. China has since continued to increase her global
leverage. Of the $5+ trillion the world owes China, the U.S. obligation to China is $1.07
trillion. China lends at market rates and not concessionary as the Word Bank and IMF.
3. What can a country achieve with $2 trillion under normal conditions? The historic $2
trillion COVID-19 stimulus package, that was signed into law on Friday, March 27, 2020
by President Trump, could have fully paid the $1.07 debt the U.S. owes China! This is
assuming an apple for apples scenario and holding other things constant. The balance
of $0.93 ($2-$1.07) trillion could have been used to forgive and clear U.S. student loans
that currently stands at approximately US$ 1 trillion.
4. China established the Asian Infrastructure Investment Bank (AIIB) in 2014 as
Eurasian’s alternative to the U.S. dominated World Bank. AIIB, headquartered in
Beijing, began operations in January 2016 and has 102 approved members as of March 2nd2020. Kenya is a prospective member. The AIIB headquarter facilities are provided free
of charge by the Chinese government. The U.S. unsuccessfully pressured countries
such as Britain, Germany, South Korea and Australia not to join AIIB. The U.S. is yet to
honor AIIB’s invitation to join as member state. China is the largest shareholder of the
AIIB at 26.06% and still maintains her strong position at the World Bank and United
Nations. AIIB had assets worth $22.6 billion as of September 2019. Due to the COVID-
19, AIIB has something in the works that will ramp up infrastructure investment in public
health, healthcare and information and communications technology to benefit member
countries. AIIB plans are going while non-member countries such as the U.S. are
fighting the COVID-19 war which, according to President Trump, is an invisible enemy.
Still, most of Chinese economic industries have resumed operations while almost the
rest of the world is in lockdown, 638,146 confirmed cases and 30,039 dead as of March
30, 2020 according to WHO.
5. While the U.S. has been busy fighting in the Middle East and Afghanistan since 2001,
China has been busy expanding her geo-economic influence in the world while subtly
challenging U.S. global influence and control. For example, China invests her trillions of
surplus dollars gained from trading with the U.S., to economically integrate China with
Eurasia and Africa. A good example is the Silk Road Strategy, that aims to tap to
Europe’s natural resources and markets by building high-speed railways, transit
corridors and pipelines. Russia is the second largest exporter of crude oil to China. On
the technology front, China has been expanding her influence in the world through
initiatives such as the 5G network. The U.S. has been unsuccessful in dissuading her
allies from adopting Chinese 5G network, which is the next generation of super-fast
wireless networks. Experts say 5G networks pose security and environmental risks.
Despite these facts, President Trump pressure on the British government was unable to
stop Huawei from building 5G network in Britain in January 2020.
6. Of course China has invested heavily in Africa through lending! Africa is debt-trapped
by China, owing $30 billion plus in infrastructure loans. Kenya owed China $6.5 billion
as of 2019.
In my opinion, since China has forgiven and/or restructured debts in the past, she
should at least forgive the debts and/or restructure the $5+ trillion global loans. This will
help the world recover from the COVID-19 pandemic.
By George Kariuki
Raleigh, North Carolina
Related Links below:
$20 trillion lawsuit in US against China for using COVID-19 as biological weapon
Class Action Filed Against China Over COVID-19 Outbreak
COVID-19: Should China Forgive $5 Trillion Global Debt?
