Webdesk: China bailed out 22 developing countries for $240 billion between 2008 and 2021. With the amount rising as more have struggled to repay “Belt & Road” infrastructure loans.
The World Bank, Harvard Kennedy School, AidData, and Kiel Institute for the World Economy analysis found that about 80% of rescue lending went to middle-income nations including Argentina, Mongolia, and Pakistan between 2016 and 2021.
China has financed hundreds of billions of dollars to underdeveloped countries. It was to build infrastructure, but lending has slowed since 2016 as many projects have failed to pay off.
Moreover, Beijing is saving its banks. Carmen Reinhart, a former World Bank chief economist and study author said. “That’s why it’s gotten into the risky business of international bailout lending.”
While, According to the analysis, Chinese loans to debt-stricken nations rose from 5% in 2010 to 60% in 2022.
Moreover, Pakistan received $48.5bn, Egypt $15.6bn, and Argentina $111.8bn. Nine countries received under $1bn.
Suriname, Sri Lanka, and Egypt received $170bn in bailout money from PBOC swap lines. Chinese state-owned banks provided $70bn in bridge loans. Rollovers totaled $140bn.
The report criticized central banks for exploiting PBOC swap lines to inflate foreign exchange reserves.
The report’s author, Brad Parks, head of AidData, a William & Mary College research lab, called China’s rescue lending “opaque and uncoordinated.”
Due to their danger to Chinese banks’ balance sheets, four-fifths of its bailout loans go to middle-income nations, while low-income countries get grace periods and maturity extensions, the research stated.
China criticized for delaying debt restructurings with Zambia, Ghana, and Sri Lanka.
It requested debt relief from the World Bank and IMF.
