The "debt trap" meme claims that China is intentionally lending vast sums of money to poor developing countries in Africa, and elsewhere, with the express intent to seize physical assets in those countries when they inevitably can't repay their debts.

This fanciful narrative sounds compelling, but the problem is that there's literally no evidence from the past twenty years since China became the world's largest bilateral creditor to support the claim. It just isn't true.

The reality of how China actually secures its loans to these countries is far more complicated.

Anna Gelpern, a law professor at Georgetown University, and Brad Parks, executive director of AidData, a development finance research institute at the College of William & Mary, were part of a team of experts that did an extensive forensic analysis of 620 Chinese loans spanning more than 20 years that revealed the financial methods Beijing employs to guarantee these debts.

Anna and Brad join Eric to discuss the findings from their new report, "How China Collateralizes."

SHOW NOTES:

AidData: How China Collateralizes by Anna Gelpern, Omar Haddad, Sebastian Horn, Paulina Kintzinger, Bradley C. Parks, Christoph Trebesch
AidData: How China Lends: A Rare Look into 100 Debt Contracts with Foreign Governments by Anna Gelpern, Sebastian Horn, Scott Morris, Brad Parks, Christoph Trebesch

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How China Really Secures Its Loans to Developing Countries

The China in Africa Podcast