[SR2Z]

Yes! Western companies are much more willing to do due diligence before issuing loans because they don't (at least these days) have an army to expropriate assets when their debtors default.

This is an actual significant difference between China and the West: China is much more willing to invest in countries with less capable governments and relatively weaker rule of law because the Chinese state is underwriting the loans and has much more weight to throw around.

There's a reason why US companies are much more reluctant to invest in developing nations.

[xyzzyz]

This is a reason, but there are other reasons too. For example, developing nations are often full of corrupt practices. This typically is not a huge problem for investors, you just pay a few bribes, it’s a cost of doing business. What is a problem, though, is laws like Foreign Corrupt Practices Act, which makes it a crime for US investors to pay bribes in foreign countries. I’m quite sure that it feels very moral to ban that, and it totally had no protectionist intent whatsoever when it was passed, but the practical outcome is that if doing business in a country is impossible without paying a few bribes here and there (and it is in most poor countries, low trust in institutions is one of the reasons they are poorer than us in the first place), they will not get any foreign investment, which will keep them poor.

[powerapple]

The big reason is that US has better choices. People don't understand the concept of risk and reward, you always put your assets on less risky and high reward projects. The only difference is that what's available to people are very different. Why would you invest there if you have better places to put your money? Companies are not stupid. US is high on the food chain.

[throw0101c]

> People don't understand the concept of risk and reward, you always put your assets on less risky and high reward projects.

The rewards being looked at may be different: the goal of private (non-government) American businesses may be to make money, the goal of Chinese entities may be something else.

[powerapple]

No, it is the same. Developing world would wish to have easier ways to make money. They wish to have big brands, good profit margin. They DO NOT have it. That's why if you go to poor countries, people can take a job risking their lives for money. It is hard to understand for westerners, but it is the reality of this world.