China's Overseas Lending

78 Pages Posted: 9 Jul 2019

See all articles by Sebastian Horn

Sebastian Horn

Kiel Institute for the World Economy; Ludwig Maximilian University of Munich (LMU)

Carmen Reinhart

Harvard University

Christoph Trebesch

Kiel Institute for the World Economy; Centre for Economic Policy Research (CEPR)

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Date Written: July 2019

Abstract

Compared with China’s pre-eminent status in world trade, its role in global finance is poorly understood. This paper studies the size, characteristics, and determinants of China’s capital exports building a new database of 5000 loans and grants to 152 countries, 1949-2017. We find that 50% of China’s lending to developing countries is not reported to the IMF or World Bank. These “hidden debts” distort policy surveillance, risk pricing, and debt sustainability analyses. Since China’s overseas lending is almost entirely official (state-controlled), the standard “push” and “pull” drivers of private cross-border flows do not apply in the same way.

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Suggested Citation

Horn, Sebastian and Reinhart, Carmen and Trebesch, Christoph, China's Overseas Lending (July 2019). NBER Working Paper No. w26050, Available at SSRN: https://ssrn.com/abstract=3416352

Sebastian Horn (Contact Author)

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Carmen Reinhart

Harvard University ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Christoph Trebesch

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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