China expecting a part of Montenegro's territory as Balkan country struggles to repay debt

Balkan country Montenegro may be forced to cede part of its territory to Beijing as country is struggling to repay $1 billion it owes to Chinese government. Montenegro h borrowed money in 2015 from Beijing in a bid to pay a Chinese contractor to build a highway allowing faster access to remote parts of country. But now, six years later, work is nowhere near complete and money has alrey been spent by government. 

According to a report by ANI, amount that Montenegro h borrowed from China is nearly a fifth size of nation’s entire economy. Previously, few European countries h claimed that it was a good idea for Montenegro to get a loan of this amount from Chinese government. However, now tiny Balkan country is asking EU for help to repay debt.

China's well thought out strategy

Meanwhile, recent report comes after International Forum for Right and Security (IFFRAS) recently revealed that China shockingly uses confidentiality clauses, barring borrowers from revealing terms and conditions of engagement or even existence of debt itself. IFFRAS said that China, which is world’s largest creditor, uses se contracts to "debt-trap" a nation. 

It ded that such terms obviously equip lenders - in this case, Chinese - to exert influence over borrower and limit borrower's policy space to cancel any verse loan or issue new environmental regulations that could impinge on terms of Chinese agreements. It ded that all Chinese creditors like commercial banks, hedge funds, suppliers, and export credit agencies seek influence over borrowing countries to increase prospect of repayment by legal, economic, and political means. 

​​“China has even devised unique ways of blending standard commercial and official lending terms to secure repayment in priority and in process gain a stronger grip over borrowing country's economic and foreign policies,” IFFRAS said. 

It ded, “This analysis of Chinese lending pattern points to a well thought out strategy to manage credit risks and overcome enforcement hurdles that could possibly arise in any borrowing country”. 

(With inputs from ANI)