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China spent $240 billion bailing out ‘Belt & Road’ countries: Study

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.

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China: ‘Belt & Road’ Project:

China spent $240 billion bailing out 'Belt & Road' countries: Study_40.1

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:

China spent $240 billion bailing out 'Belt & Road' countries: Study_50.1

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:

China spent $240 billion bailing out 'Belt & Road' countries: Study_60.1

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.

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