FRANKFURT: China’s years-long lending spree in poorer countries, particularly in Africa, poses a “serious danger” that could plunge the world into the next financial crisis, German Chancellor Olaf Scholz warned Friday.
“There is a really serious danger that the next major debt crisis in the global south will stem from loans that China has granted worldwide and doesn’t have a full overview of because there are so many players involved,” Scholz said.
“That would then plunge both China and the global south into a major economic and financial crisis and, incidentally, would not leave the rest of the world unaffected, to put it politely. So this is a serious concern.”
The comment was made during an on-stage discussion at Germany’s Catholic Day in Stuttgart, where a fellow panellist said Europe had stood by while Chinese money was building African roads and universities and increasing Beijing’s clout on the continent.
Critics have long accused China of luring lower-income countries into debt traps by offering huge unaffordable loans.
Beijing disputes the charge, arguing that its loans are designed to alleviate poverty.