Laos and the Chinese Debt Crisis in Africa

The China in Africa Podcast

The small, impoverished land-locked Southeast Asian nation of Laos is a focal point of China's ambitious Belt and Road Initiative and also emerging a case study in how Beijing is handling a burgeoning debt crisis in the country. Just as in a number of African countries, Laos is increasingly unable to repay the massive infrastructure loans that it borrowed from China to build badly-needed infrastructure including railways and power transmission.

But there are some interesting experiments going on in Laos that might shed some light on how China plans to handle some of its debts in Africa. Specifically, a debt-for-equity swap with the country's state-owned power company could be an option that is employed in places like Kenya where the government is already behind on some of its loan payments.

Hong Kong University of Science and Technology Research Assistant Professor Kelly Wanjing Chen has been closely following the debt crisis in Laos and published a paper on the topic this fall. She's also an expert on Chinese debt financing in the global South. Kelly joins Eric & Cobus to discuss the Chinese debt crisis in Laos and whether there are any lessons that can be applied to what's happening in Africa.

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