JOHANNESBURG听–听颁丑颈苍补听蝉辫别苍迟听$240 billion听产补颈濒颈苍驳听辞耻迟听22 developing听肠辞耻苍迟谤颈别蝉听between 2008 and 2021, with the amount soaring in recent years as more have struggled to repay loans聽蝉辫别苍迟听building “Belt & Road” infrastructure, according to a听蝉迟耻诲测听published Tuesday.
Almost 80% of the rescue lending was made between 2016 and 2021, mainly to middle-income听肠辞耻苍迟谤颈别蝉听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.
颁丑颈苍补听丑补蝉听lent聽hundreds of billions of dollars to build infrastructure in developing听肠辞耻苍迟谤颈别蝉, but lending 丑补蝉听聽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 bail辞耻迟听lending,” said Carmen Reinhart, a former World Bank chief economist and one of the听蝉迟耻诲测‘s authors.
Chinese loans to听肠辞耻苍迟谤颈别蝉听in debt distress soared from less than 5% of its overseas lending portfolio in 2010 to 60% in 2022, the听蝉迟耻诲测听found.
Argentina received the most, with $111.8 billion, followed Pakistan on $48.5 billion and Egypt with $15.6 billion. Nine听肠辞耻苍迟谤颈别蝉听received less than $1 billion.
People’s Bank of聽颁丑颈苍补听(PBOC) swap lines accounted for $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 $70 billion. Rollovers of both kinds of loan were $140 billion.
The听蝉迟耻诲测听was critical of some central banks potentially using the PBOC swap lines to artificially pump up their foreign exchange reserve figures.
China‘s rescue lending is “opaque and uncoordinated,” said Brad Parks, one of the report’s authors, and director of AidData, a research lab at William & Mary College in the United States.
The bail辞耻迟听loans are mainly concentrated in the middle income听肠辞耻苍迟谤颈别蝉听that make up four-fifths of its lending, due to the risk they pose to Chinese banks’ balance sheets, whereas low income听肠辞耻苍迟谤颈别蝉听are offered grace periods and maturity extensions, the report said.
颁丑颈苍补听is negotiating debt restructurings with听肠辞耻苍迟谤颈别蝉听including Zambia, Ghana and Sri Lanka and has been criticized for holding up the processes. In response, it has called on the World Bank and International Monetary Fund聽to also聽. – Reuters
