[yorwba]

Yes, and that's a bad thing for the Chinese investors.

As an analogy, consider a bank giving someone a loan to build a house. In case of default, they'll repossess the house to recoup some of the amount.

Does this mean it's a good idea for a bank to give huge loans to people who they know won't be able to pay it back, so that they'll get the house? Obviously not! Repossession only avoids losing the full amount of the loan; the bank is still making a loss overall.

Laos ceding majority ownership of the power grid to the Chinese company that built it only means that the infrastructure investment isn't as profitable as expected (otherwise they could just use the profits to service the loan) and they're cutting their losses.

[refurb]

I think the point is that it's about more than just financials. If you own the national grid for a country, you can have a lot more political influence than before.

"We're more than happy to provide the necessary grid updates, but we're going to need to see some reciprocation, maybe sign that military base lease we asked for?"

[yorwba]

They don't need to own the national grid for that. The influence in that case would come from money they are offering, not the money they already paid.

They could've made the exact same demand the first time, but what they actually did was more like

"We're more than happy to provide the necessary grid updates, just pay the money back later, okay?"

And then Laos decided to renegotiate the agreement instead...

[refurb]

Those are very different situations. In the first situation, Laos' national infrastructure is at risk. They're screwed if they don't accept help.

In the second situation, they can say no to the money and be no worse off.