The "New Silk Road" project, which finances the construction of port, rail and land infrastructure across the globe, has created much debt to China for participating countries. At the end of 2020, of the 97 countries for which data was available, Pakistan ($77.3 billion of external debt to China), Angola (36.3 billion), Ethiopia (7.9 billion), Kenya (7.4 billion) and Sri Lanka (6.8 billion) held the biggest debts to China. The countries with the biggest debt burdens in relative terms were Djibouti and Angola, followed by the Maldives and Laos, which has just opened a debt-laden railway line to China. The President of the World Bank, David Malpass, called the level of debt many countries once again hold “unsustainable” in January.
The Paris Club used to hold the majority of low-income countries’ debt before it was restructured and largely forgiven after the turn of the millennium for qualifying, developing countries. Whether such a process will be available for Chinese debt is unclear. As of 2020, China had officially lent around $170 billion to low and middle-income countries, up from just around $40 billion in 2010.
