‘Complex’ reasons behind drop in Chinese lending drop after G20 debt relief plan
- Bureaucracy could have contributed to Chinese banks suspending payments during pandemic assistance programme, study finds
- China’s loan disbursements for existing projects fell by 51 per cent during the two years of the scheme
In 2020 and 2021, Chinese loan disbursements for existing projects fell by 51 per cent on the previous two years, while other bilateral creditors increased their outlays by 17 per cent. Payments in the same period by multilateral creditors rose by 15 per cent.
The findings, based on World Bank data, were published in April as part of a study on the G20 Debt Service Suspension Initiative (DSSI) by the China Africa Research Initiative (CARI) at Johns Hopkins University.
The DSSI, unveiled to help low-income countries through the pandemic, saw US$13.1 billion in debts rescheduled from all creditors in 2020 and 2021, with Chinese creditors providing US$8.2 billion.
The researchers said Chinese loan disbursements to the 46 countries that applied for DSSI relief fell from US$30 billion in the two years before the pandemic, to US$15 billion in 2020-2021.
CARI founding director Deborah Brautigam, professor of international political economy at Johns Hopkins University, and Yufan Huang, a PhD student at Cornell University’s department of government, examined a number of possibilities for the scale of the drop.