China spent $240bn on other countries’ Belt and Road debts between 2008 and 2021
China spent $240bn (£195bn) bailing out countries struggling under their Belt and Road initiative debts between 2008 and 2021, new data shows.
Research found that Chinese state-backed lenders had released bailout funds to 22 countries, including Argentina, Pakistan, Sri Lanka and Ukraine. Almost 80% of the emergency rescue lending was issued after 2016, reaching more than $40bn in 2021.
The increase in emergency financing since 2016 correlates with a drop in Chinese lending for infrastructure projects that are part of the Belt and Road initiative. Commitments from China’s two main institutional lenders, China Development Bank and the Export-Import Bank of China (China Exim) fell from a peak of $87bn in 2016 to $3.7bn in 2021, a drop of more than 95%, according to data analysed by Boston University.
The failure of several infrastructure projects and the debt problems experienced by several recipient countries, hurt by the rising cost of servicing their loans, has forced a recalibration of China’s flagship overseas development programme.
But the war in Ukraine, the Covid-19 pandemic, supply chain problems and rising interest rates have contributed to a global economic crisis that has created difficulties for lenders of all stripes. China’s willingness to issue emergency financing may also therefore be an “acknowledgement that the Belt and Road initiative is as much about relationship-building as it is about infrastructure,” said Cobus van Staden, the managing editor of the China-Global South Project website.
“This lending will cement these relationships and make China even more central to [developing countries’] future economic trajectories.”
The share of Beijing’s overseas lending that is directed towards emerging financing has
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