China: Is it burdening poor countries with unsustainable debt?

China has faced criticism for its lending practices to poorer countries, accused of leaving them struggling to repay debts and therefore vulnerable to pressure from Beijing. But that is rejected by China, which accuses some in the West of promoting this narrative to tarnish its image. It says: "There is not a single country that has fallen into [a] so-called 'debt trap' as a result of borrowing from China."

China is one of the world's largest single creditor nations. Its loans to lower and middle-income countries have tripled over the past decade, reaching $170bn (£125bn) by the end of 2020. However, China's overall lending commitments are likely to be significantly greater than these figures suggest.

Research by AidData, an international development body at William & Mary University in the US, finds that half of China's lending to developing countries is not reported in official debt statistics. It is often kept off government balance sheets, directed to state-owned companies and banks, joint ventures or private institutions, rather than directly from government to government.

Read more