A study published on Tuesday revealed that China has spent $240 billion rescuing 22 developing countries between 2008 and 2021. This amount has increased in recent years as more countries struggled to repay loans taken for the building of “Belt & Road” infrastructure.

The researchers, from the World Bank, Harvard Kennedy School, AidData, and the Kiel Institute for the World Economy, found that almost 80 per cent of the rescue lending was made between 2016 and 2021, primarily to middle-income countries such as Pakistan, Argentina, and Mongolia. However, lending has decreased since 2016 as many projects failed to generate expected financial dividends.

The report also highlighted that Beijing’s ultimate objective was to rescue its banks, which is why it engaged in the risky business of international bailout lending. Chinese loans to countries in debt distress increased from less than 5 per cent of its overseas lending portfolio in 2010 to 60 per cent in 2022.


Argentina received the highest amount of bailout money with $111.8 billion, followed by Pakistan with $48.5 billion and Egypt with $15.6 billion, while nine countries received less than $1 billion.

According to Reuters, the People’s Bank of China (PBOC) swap lines accounted for $170 billion of the rescue financing, including in Suriname, Sri Lanka, and Egypt. Bridge loans or balance of payments, supported by Chinese state-owned banks, amounted to $70 billion. Rollovers of both types of loans totaled $140 billion. However, the study criticized some central banks for potentially using the PBOC swap lines to artificially pump up their foreign exchange reserve figures.

China is currently negotiating debt restructurings with several countries, including Zambia, Ghana, and Sri Lanka. However, it has been criticized for holding up the processes. In response, it has called on the World Bank and International Monetary Fund to offer debt relief as well.