(MENAFN) A new study by AidData, a research lab at the College of William and Mary in Virginia, has found that China provided $240 billion in rescue lending to 22 developing countries as part of the Belt and Road Initiative between 2000 and 2021. The report highlighted that the scale of China's global bailout lending program is growing rapidly, with more than $185 billion extended in the past five years alone (2016-2021).
The study also revealed that China has extended $170 billion through its swap line network, a vital tool of the country's overseas crisis management, to countries in financial or macroeconomic distress. The report noted that this amount involves a large number of rollovers, as short-term People's Bank of China swap loans are often extended again and again, resulting in a de facto maturity of more than three years, on average.
In addition to the swap line network, the rest of the $240 billion was provided through types of rescue lending such as bridge loans or balance of payments support by Chinese state-owned banks and enterprises, such as the China Development Bank. The top three debtors identified in the paper were Argentina, Pakistan, and Egypt.
The Belt and Road Initiative, launched in 2013, is a massive infrastructure project aimed at connecting Asia, Europe, and Africa through a network of land and sea routes. The initiative has been criticized by some for burdening participating countries with excessive debt, while others have praised it as a means of promoting economic growth and development.
China's rescue lending program is seen as a way of supporting participating countries during times of economic crisis, and the study suggests that the scale of this program is continuing to grow. The report's findings highlight the important role that China is playing in the global economy, particularly in developing countries where access to financing can be limited. However, concerns remain about the long-term implications of China's lending practices and the potential for excessive debt burdens to impact the economic stability of participating countries.
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