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Is Debt-for-Equity Chinese for “Debt Trap?”

Laotian Minister of Energy and Mines, Dr. Khammany inthirath and China's ambassador to Laos, Jiang Zaidong, sign a shareholders agreement that hands over control of Laos' electricity transmission to a Chinese state-owned company. Photo via XInhua.

Tucked away in a remote corner of Southeast Asia, an important experiment is now underway that could have profound implications for how China manages its vast loan portfolio in Africa and in other developing regions.

Last week, Laos’s state-owned electric power company, Électricité du Laos, signed a deal with a Chinese state-owned power company to create a new joint venture that would put the Chinese in control of electricity distribution in the country.

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