For at least a couple of years, it has been clear that the wheels are coming off China’s Belt and Road Initiative, the $838bn programme launched by Beijing in 2013 to build infrastructure in about 160 mostly developing countries. Yet as Beijing seeks to contain the fallout from stalled projects and non-performing loans, it risks complicating matters with a surge in “emergency lending”.
New data from AidData, a US-based research lab, has uncovered evidence of Chinese rescue loans to Pakistan, Argentina, Sri Lanka, Mongolia, Kenya, Venezuela, Ecuador, Laos, Angola, Suriname, Belarus, Egypt and Ukraine. Three of the largest recipients, Pakistan, Sri Lanka and Argentina, have together received as much as $32.83bn since 2017, AidData has found.
This type of credit is very different from the infrastructure loans that dominate the BRI. It is intended to save countries from default on their foreign debt, including that borrowed from Chinese institutions and used to build ports, airports, roads, railways and other BRI infrastructure.