Study: China Spent $240B Bailing Out 'Belt & Road' Countries

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Facts

• An international study published Tuesday claims that China spent $240B bailing out 22 developing countries between 2008 and 2021, with the figure rising in recent years as they have struggled to repay loans spent building 'Belt & Road' infrastructure.¹
• The paper written by researchers from the World Bank, AidData at William & Mary, Harvard Kennedy School, and the Kiel Institute for the World Economy shows that almost half of these bailout loans, or $104B, were granted between 2019 and the end of 2021.²
• Despite not exceeding the amount of bailouts provided by either the US or the International Monetary Fund (IMF), Beijing has become a key lender for developing countries, especially those involved in its Belt & Road Initiative (BRI) infrastructure megaproject.³
• Researchers also found that Chinese rescue lending — with an average interest rate of 5%, or 3 points higher than a typical IMF rescue loan— is mostly directed at developing nations that have high levels of debt to China, allegedly in an effort to rescue its own banks.⁴
• According to the report, Argentina has received the most rescue loans from China, adding up to nearly $112B. It was followed by Pakistan and Egypt, with $48.5B and $15.6B, respectively.⁵
• The Chinese Foreign Ministry's spokesperson, Mao Ning, responded to the report on Tuesday by saying that China had never used its loans as political leverage. He also said that China never attached political strings to its loans.⁵

Sources: ¹Reuters, ²Ft, ³CNN, ⁴Guardian and ⁵Dw.com.

Narratives

• Anti-China narrative, as provided by Washington Post. The PRC has been using developing nations as pawns in its bid for influence against the US, exploiting poor countries under the guise of helping them. Currently the world's largest government creditor to such nations, Beijing now accounts for nearly half of these loans, which often come at high-interest rates. As the bill is coming due, China once again reveals its greed and the predatory nature of its so-called financial cooperation.
• Pro-China narrative, as provided by Liberation news. The West has been spreading ill-founded narratives about China's alleged “debt trap diplomacy' for years — a myth that has three blatant problems: China doesn't unilaterally dictate the BRI projects to other countries, its development financing is largely recipient-driven through bilateral interactions and deals, and it has never seized an asset because a country defaulted on a loan. The real debt trap has been carried out by the IMF and World Bank.