Generally China avoids giving or lending cash up front to the recipient countries. Rather,most deals are quasi barter. Chinese construction and engineering companies, employing a large phalanx of skilled Chinese workers and some local workers, receive funding directly from, say, the China Export-Import Bank. Then over several years the host country agrees to repay the bank in commodity terms—oil or, say, iron ore, whose production and marketing may be facilitated by the construction project itself. To increase leverage in assuring repayment, China may also provide follow-on maintenance crews for the railway, port, or power plant—as well as
dangling the possibility of complementary projects in the future.
