Indonesia’s Jakarta-Bandung project was financed mostly by loans from China Development Bank, though questions remain about exactly who gave the order. Sixty percent of the $5.3 billion funding is denominated in US dollars, the remaining 40% in yuan. Give the target the most concessions, and give up some precious dollars to do it, but extract in return the future; payment for resources in yuan.
To many, it has started to look more like an extortion racket. You need the dollars; we get to tell you how things go once you inevitably fall behind on payments. The FT’s investigations, which covered Indonesia as well as others in Laos and Serbia to Hungary, found the primary sticking point to be just that.
