At least 75 of the world’s poorest countries are required to repay a combined $22 billion in debt to China this year, according to a report released Tuesday by Australia’s Lowy Institute.
The report said Beijing is shifting its focus from issuing new loans to recovering existing debts under its Belt and Road Initiative, a strategy that could slow poverty reduction, hinder development and heighten economic and political instability in low-income countries.
Most of the loans were provided with state backing for projects ranging from schools, hospitals and bridges to highways, ports and airports. The Belt and Road program has been concentrated in developing nations, where governments often struggle to access private capital or financing from other states.
Critics have accused China of engaging in “debt-trap diplomacy,” alleging that Beijing deliberately extends loans that are difficult to repay in order to gain leverage over recipients. China rejects these claims, while some borrowing countries have defended Beijing as a reliable partner that lent when others refused.
The Lowy Institute warned that the unprecedented scale of repayments due this year could provide Beijing with significant political influence, particularly as U.S. foreign aid contracts. The report also noted China’s lack of transparency on Belt and Road lending, citing a 2021 Aid Data estimate that Beijing was owed some $385 billion in hidden debts globally.
Afghanistan is among the latest countries linked to the Belt and Road program, with the Taliban recently reaching an agreement with Pakistan and China to extend one of its projects into Afghan territory, sparking fresh concerns over the initiative’s future impact.
