A recent study conducted by researchers from the World Bank, Harvard Kennedy School, AidData, and the Kiel Institute for the World Economy has revealed that China spent approximately $240 billion from 2008 to 2021 bailing out 22 developing countries that had difficulty repaying loans taken for Belt and Road infrastructure projects.
China: ‘Belt & Road’ Project:
A recently published study shows that from 2008 to 2021, China provided approximately $240 billion to bail out 22 developing nations that encountered challenges in paying back loans obtained for the Belt and Road infrastructure projects.
Pakistan, Argentina, and Mongolia: Main beneficiaries:
The report further reveals that around 80 per cent of this bailout money was spent from 2016 to 2021, with middle-income countries like Pakistan, Argentina, and Mongolia being the primary beneficiaries.
Argentina received the highest amount of $111.8 billion, followed by Pakistan with $48.5 billion and Egypt with $15.6 billion. The study also highlights that China’s spending on Belt and Road infrastructure projects has reduced since 2016 due to many projects’ underperformance.
Financing of ‘Belt & Road’ Project:
The bailout money of $240 billion was sourced from various channels, with approximately $170 billion coming from the People’s Bank of China (PBOC) swap lines that included countries such as Suriname, Sri Lanka, and Egypt.
Chinese state-owned banks also provided $70 billion in the form of bridge loans or balance of payments support, while the rollovers for both these types of loans amounted to $140 billion.