China is going it alone and restructuring debt to longer terms and getting countries to go deeper into debt. Like a pusher giving a junkie a line of credit and a new fix and the IMF and the world's biggest bond funds don't like it but seem powerless to stop it. Read it somewhere a long time ago but the easiest way to take over a country is to control its debt. Don't need an army or to fire a shot, as long as said country doesn't rebel. This isn't going to end well when China tries to take over the airports and rails and mines of these small countries. Need to read the article to understand the full depth of how China is changing the paradigm and it seems to be to the worst. Their approach is ultimately goign to fail and then they will either lose or try and take control of assets. China Turns the Tables on Wall Street (msn.com) China is upending how the international financial system handles debt crises in the developing world. Wall Street isn’t happy. Large bond fund managers cried foul last month when China blocked their deal to salvage investments in defaulted Zambian debt. The smackdown came just weeks after Chinese officials brokered a private debt restructuring with Sri Lanka, outmaneuvering Western governments that were trying to do the same. China can set its own rules because it has become the biggest lender to developing countries, outweighing Western powers that dominated such matters for more than 50 years. The new reality is rankling the old guard and making debt crises around the world longer and harder to predict. ............................ China, in contrast, mostly negotiated on its own with debtor countries. It differed in other ways, too. China offered debt extensions to borrowers, but not debt reductions that the Paris Club and bondholders sometimes agreed to. It also resumed lending faster after default than Western countries. In Sri Lanka, China has refused to team up with other countries, cutting side deals with the government instead. The country’s restructuring has progressed much faster than Zambia’s.
