According to a new AidData report released this week, Chinese financial institutions lent $1.3 trillion to developing countries between 2000 and 2021.
According to the study, China’s overseas lending portfolio in the developing world currently supports countries in financial distress to the tune of 80%. As of 2021, developing countries are said to owe Chinese lenders between $1.1 trillion and $1.5 trillion.
Researchers at AidData examined nearly 21,000 projects in 165 low- and middle-income countries that received Chinese grants and loans between 2000 and 2021.
The report states that China is still the world’s single largest official source of international development finance.
“Beijing is navigating an unfamiliar and uncomfortable role – as the world’s largest official debt collector,” AidData researchers wrote, adding that the country is “increasingly behaving like an international crisis manager.”
Data shows that the cumulative number of Chinese grant- and loan-financed infrastructure projects in the developing world with significant environmental, social, or governance (ESG) risk exposure skyrocketed from 17 projects worth $420 million in 2000 to 1,693 projects worth $470 billion in 2021.
According to the report, China would not have become the world’s largest official creditor to the developing world – larger than the World Bank, IMF, and all Paris Club creditors combined – if it did not have a massive stockpile of foreign exchange reserves. According to AidData, the country’s official foreign currency reserves total approximately $3.1 trillion as of 2023.
According to the study, the destinations of Chinese overseas lending have shifted. Loan commitments to African countries are said to have fallen from 31% of total commitments in 2018 to 12% in 2021, while lending to European countries nearly quadrupled to 23%.
