BEIJING: China spent $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 Tuesday.
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.
Chinese loans to countries in debt distress soared from less than 5pc of its overseas lending portfolio in 2010 to 60pc in 2022, the study found.
Argentina received the most, with $111.8bn, followed Pakistan on $48.5bn and Egypt with $15.6bn. Nine countries received less than $1bn. –Agencies
