If that wasn’t the intention they would have considered @shipwreck@hexbear.net 's points before hand.
The problem is currency swapping, China effectively put more money into circulation in their economy and assuming a standard capitalist economy that leads to inflation etc. As that money circulates, some of it will sit on banks, may earn interest which will have to be paid in that currency etc.
It obviously isn’t a malicious act, it just that China can’t realy understand or act outside the current mainstream economic principles or perhaps they simply thought this wouldn’t be an issue.
Its entirely possible both countries agreed a currency which the borrower has easier access to is better, perhaps that was even Burkina Faso’s request we don’t know.
I think the best solution would’ve been for China to directly build whatever is necessary through its own funds and hand over the project once its finished. It would still create local currency(local economy would be involved) but not a massive cash injection, they would repay via direct trading instead.
In the end if Burkina Faso may request to pay in yuan, doubt it though, mainstream economics is omnipresent.
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Does China have to demand repayment in USD or CFA Francs?
If that wasn’t the intention they would have considered @shipwreck@hexbear.net 's points before hand.
The problem is currency swapping, China effectively put more money into circulation in their economy and assuming a standard capitalist economy that leads to inflation etc. As that money circulates, some of it will sit on banks, may earn interest which will have to be paid in that currency etc.
It obviously isn’t a malicious act, it just that China can’t realy understand or act outside the current mainstream economic principles or perhaps they simply thought this wouldn’t be an issue. Its entirely possible both countries agreed a currency which the borrower has easier access to is better, perhaps that was even Burkina Faso’s request we don’t know.
I think the best solution would’ve been for China to directly build whatever is necessary through its own funds and hand over the project once its finished. It would still create local currency(local economy would be involved) but not a massive cash injection, they would repay via direct trading instead.
In the end if Burkina Faso may request to pay in yuan, doubt it though, mainstream economics is omnipresent.