JOHANNESBURG: China spent US$240 billion bailing out 22 developing countries between 2008 and 2021, with the amount soaring in recent years as more have struggled to repay loans spent building “Belt & Road” infrastructure, according to a study published on Tuesday (Mar 28).
Almost 80 per cent of the rescue lending was made between 2016 and 2021, mainly to middle-income countries including Argentina, Mongolia and Pakistan, according to the report by researchers from the World Bank, Harvard Kennedy School, AidData and the Kiel Institute for the World Economy.
China has lent hundreds of billions of dollars to build infrastructure in developing countries, but lending has tailed off since 2016 as many projects have failed to pay the
expected financial dividends.
“Beijing is ultimately trying to rescue its own banks. That’s why it has gotten into the risky business of international bailout lending,” said Carmen Reinhart, a former World Bank chief economist and one of the study’s authors.
Argentina received the most, with US$111.8 billion, followed Pakistan on US$48.5 billion and Egypt with US$15.6 billion. Nine countries received less than US$1 billion.
People’s Bank of China (PBOC) swap lines accounted for US$170 billion of the rescue financing, including in Suriname, Sri Lanka and Egypt. Bridge loans or balance of payments support by Chinese state-owned banks was US$70 billion. Rollovers of both kinds of loan were US$140 billion.
Source: Reuters
