(TibetanReview.net, Oct11’25) – Developing nations are now repaying much more to China than they receive in new loans, showing a growing strain on economies already battling debt distress and underinvestment in climate action, reported africa.businessinsider.com Oct 11, citing a new report by Boston University’s Global Development Policy Centre.
The report, Reviving Chinese Development Finance in the Global South, has determined that net debt transfers from China to developing countries turned negative in 2022 and 2023, as nations collectively repaid $3.9 billion more each year than they borrowed.
China, the world’s largest bilateral lender, has long been a major financier of infrastructure in the Global South, channelling over $472 billion through its two policy banks, the China Development Bank and the Export-Import Bank of China, between 2008 and 2024, the report said, citing Reuters.
The study has noted that these funds supported more than 900 projects worth $316 billion in transport, energy, water systems, and digital infrastructure, significantly contributing to public assets, economic growth, and poverty reduction.
The report’s authors – Rebecca Ray, Kevin Gallagher, Zheng Zhai, Marina Zucker-Marques, and Yan Liang – have warned that without a rebound in Chinese overseas lending, growth and climate investment in developing nations could stall.
The report is stated to have outlined five measures to reinvigorate development finance in ways that benefit both China and its partner countries: refinancing distressed loans, issuing RMB-denominated bonds, expanding green lending, encouraging cooperative foreign investment, and deepening South–South trade.
The report sees some of these measures being begun to be implemented, including China’s announcement in June of plans to offer zero-tariff treatment to all 53 African countries with which it maintains diplomatic ties.
The proposal is seen as a strategic move to boost imports from Africa while offering a lifeline to Chinese state-owned firms struggling with declining demand at home.