China owed US$385B in loans from 165 countries, including ‘hidden debt’ from poor nations: report

DM

One hundred and sixty five countries owe a total of US$385 billion in ‘hidden debts’ to China, by participating in belt-and-road initiatives (BRI), a study had found, with 42 poorer countries owing debt exceeding 10 per cent of their individual GDP. AidData, a U.S.-based research firm, found that that several of the loans have also been underreported to the World Bank, kept off the public balance sheets by way of special purpose and semi-private loans. The loans are “substantially greater” than research institutions, credit rating agencies or intergovernmental organizations with surveillance responsibilities “previously understood,” reads the study published on Wednesday. Global organizations such as the World Bank and International Monetary Fund were aware of the problem, AidData stated, but the report quantified the scale of how much went underreported. Over 13,000 BRI projects worth more than US$843 billion had been analyzed in 165 countries between 2000 and 2017. AidData found that China’s overseas lending had dramatically changed from government-to-government loans, to almost 70 per cent of the financing going to state-owned companies, banks, joint ventures, private institutions and special purpose vehicles (SPVs).

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