China has dramatically curtailed its lending in recent years. Now, it’s emerging as the largest debt collector for many of the world’s poorest nations — a shift that threatens to undermine poverty reduction efforts and fuel instability, according to a new report.

Lending for China’s Belt and Road Initiative — which includes funding for a massive series of new railways, ports and roads in the developing world — began winding down before the COVID-19 pandemic, according to Peak repayment: China’s global lending, released this month by Australia’s Lowy Institute, a foreign policy think tank. The report points to diplomatic pressure within China to restructure unsustainable debt and to recover outstanding debts from abroad for the change.

  • Avid Amoeba@lemmy.caEnglish
    9·
    4 days ago

    A 2023 Associated Press analysis of the dozen countries most indebted to China — including Pakistan, Kenya, Zambia, Laos and Mongolia — found debt servicing payments were consuming vitally needed tax revenue for schools, electricity, food and fuel.

    I guess this would be a litmus test for the CCP’s foreign policy for the future. Whether they choose to strengthen stability by canceling or restructuring debt, or foster PRC-branded instability. They’ve been materially playing the stability and reliability partner card recently with some. We’ll see if this factors into these debt decisions.