Skip to content
Search

Latest Stories

China spent £194.97 billion rescuing 'Belt and Road Initiative' nations, says study

Argentina was the largest beneficiary, receiving £90.80bn, equivalent to $111.8bn, followed by Pakistan with £39.39 ($48.5bn) and Egypt with £12.67 ($15.6bn)

China spent £194.97 billion rescuing 'Belt and Road Initiative' nations, says study

A recent study published on Tuesday (28) revealed that China has allocated approximately £194.97 billion equivalent to about $240 billion in financial assistance to 22 developing nations from 2008 to 2021.

The amount has notably increased in recent years due to more countries experiencing difficulties in repaying loans related to the construction of "Belt and Road Initiative" (BRI) infrastructure.


Researchers from prominent institutions such as the World Bank, Harvard Kennedy School, AidData, and the Kiel Institute for the World Economy found that nearly 80 per cent of the lending occurred between 2016 and 2021, with the primary beneficiaries being middle-income countries such as Mongolia, Pakistan, and Argentina.

China has provided loans amounting to hundreds of billions of dollars for infrastructure development in developing countries. However, lending activity has declined since 2016 due to several projects failing to generate the anticipated financial returns.

"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.

BRI nations have faced financial strain due to high inflation and interest rates, compounded by the pandemic, making it hard to repay debts.

Countries have received bailouts to extend loans and remain solvent. China claims over 150 countries have joined the trillion-dollar BRI infrastructure initiative launched by President Xi Jinping ten years ago.

According to Beijing, the objective of the initiative is to strengthen friendly trade ties with other countries, especially those in the developing world.

However, critics have alleged that China entices lower-income nations into debt traps by providing massive, unsustainable loans.

Although smaller than the International Monetary Fund and the significant liquidity support provided by the US Federal Reserve, China's bailouts have rapidly increased, as indicated in the AidData report.

Argentina was the largest beneficiary, receiving £90.80bn, equivalent to $111.8bn, followed by Pakistan with £39.39 or $48.5bn and Egypt with £12.67 equalling $15.6bn. Nine nations received less than $1bn or £0.81bn.

The People's Bank of China's (PBOC) swap lines accounted for £138.10bn or $170bn of the financing, including in Suriname, Sri Lanka, and Egypt.

The authors of the report stated that "Beijing has targeted a limited set of potential recipients, as almost all Chinese rescue loans have gone to low- and middle-income BRI countries with significant debts outstanding to Chinese banks,".

The study cautioned that Chinese loans tend to be less transparent than other last-resort international lenders and often carry an average interest rate of 5 per cent, compared to the typical 2 per cent rate on an IMF loan.

The majority of such loans were "rollovers," with short-term loans being repeatedly extended to refinance upcoming debt obligations.

According to the report, Chinese state-owned banks and companies provided £56.86bn or $70bn in bridge loans or balance of payments support, while rollovers of both types of loans amounted to £113.72bn or $140bn.

China's government responded to the criticism, stating that its overseas investments were based on "openness and transparency" principles.

The foreign ministry spokesperson denied that China had compelled countries to borrow or repay loans and claimed that loan agreements were not linked to political self-interest.

However, China has been criticised for delaying debt restructurings with countries like Zambia, Ghana, and Sri Lanka.

(With inputs from agencies)

More For You

Jaguar’s bold gamble: Can it woo young, wealthy drivers with a £123k EV?

Jaguar’s bold gamble: Can it woo young, wealthy drivers with a £123k EV?

JAGUAR’S ambition to seduce younger, richer drivers was on full display in Paris with a presentation of its newest prototype, the Type 00, which promises all-electric luxury... at a steep price.

The low-slung, muscular-looking concept car presented to European reporters last Friday (21) prefigures a production model expected mid-2026 at a base cost of €150,000 (£123,472.8).

Keep ReadingShow less
Starmer-Trump-Getty

Trump has suggested the possibility of a 'great' trade deal that could help the UK mitigate the impact of tariffs he has pledged to introduce. (Photo: Getty Images)

Starmer, Trump talk trade deal progress in 'productive' discussion

KEIR STARMER and Donald Trump spoke on Sunday about ongoing UK-US trade negotiations, with Downing Street describing the talks as "productive."

Since leaving the European Union, the UK has been working to secure a trade agreement with the United States. Successive British governments have pursued a deal, but it has remained elusive.

Keep ReadingShow less
modi-trump-getty
Trump shakes hands with Modi during a joint press conference at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)

India-US trade talks end with no sign of tariff relief

INDIA and the United States have agreed to move forward on finalising a part of their bilateral trade deal this year, but there was no indication of any tariff relief for India.

Trade discussions took place in New Delhi ahead of the implementation of US president Donald Trump's new trade tariff regime, which includes import levies on India, set to take effect from 2 April.

Keep ReadingShow less
Tesco Clubcard Changes: Update Your App Before the Deadline

The digital Clubcard offers convenience and flexibility

Getty

Tesco Clubcard changes: Customers urged to update app before Monday deadline

Tesco has issued an urgent call for action to millions of its Clubcard users, advising them to update their Tesco Shopping & Clubcard app before Monday, 31 March 2025. The supermarket giant is rolling out an important update to improve data protection and online security, and failure to update the app by the deadline will leave customers unable to access their digital Clubcard benefits.

Update to ensure enhanced security

The upcoming changes are being implemented to enhance the security of customer data and improve overall protection. Tesco has highlighted the importance of this upgrade, as it seeks to safeguard customer information and keep their online shopping experiences secure.

Keep ReadingShow less
OpenAI Restricts ChatGPT’s Image Feature After Viral Ghibli Trend

Altman addressed the impact of the popular Ghibli-style image trend on OpenAI’s resources

Getty

OpenAI limits ChatGPT’s image generation feature amid viral Ghibli image trend

OpenAI CEO Sam Altman has announced temporary limitations on the company’s image generation feature in response to overwhelming demand driven by a viral trend. On Thursday, Altman addressed the impact of the popular Ghibli-style image trend on OpenAI’s resources, particularly its reliance on GPUs (graphics processing units). Altman revealed that the surge in demand for ChatGPT’s image generation tool has led to significant strain on the company’s infrastructure, prompting the introduction of temporary speed limits for users.

In a post on X (formerly Twitter), Altman shared the company’s response to the unexpected demand, stating, “It’s super fun seeing people love images in ChatGPT, but our GPUs are melting. We are going to temporarily introduce some rate limits while we work on making it more efficient. Hopefully won’t be long! ChatGPT free tier will get 3 generations per day soon.”

Keep ReadingShow less