Tuesday, January 14, 2020

US International Development Finance Corporation vs China

The Financial Times published on 23 December 2019 an article titled "China's $1.3tn Global Spending Spree Will Collapse, Says Top US Official" by James Politi and Demetri Sevastopulo.

The article notes that Adam Boehler, the new chief executive of the US International Development Finance Corporation, which replaces the Overseas Private Investment Corporation, said that China's international investments were "100 per cent" like a house of cards because of "debt overload, poor infrastructure, bribes [and] lack of transparency." Boehler added "we have to be there as an alternative because I could see China take down a whole bunch of emerging countries . . . there will be more and more cracks and then the glass will break."


Some unsolicited advice for Mr. Boehler and the International Development Finance Corporation: Get your own house in order and leave the criticism of Chinese financing to others. There are legitimate criticisms of China's approach to finance, but the sky is not falling.