Reviewing How China Lends: What Did 100 Chinese Lending Contracts Teach Us?
23 Pages Posted: 3 May 2022
Date Written: April 30, 2021
China brokered its first loan to a developing country in 1960. Half a century later it began to emerge as a major player in official development finance. It did so an independent creditor operating mainly outside of the official finance frameworks that dominated the second half of the 20th century. Little in general is known about the mechanics of China’s official finance, with respect to how it deviates from OECD norms or even from Gulf state lender norms, as an example. This review studies an important contribution to that gap – a study of 100 Chinese lending contracts against a benchmark sample. This sheds new light on China’s “commercially-savvy” and innovative approach to official finance, and some recurring features of its loan models in particular. That in turn calls for more research on the net impacts, including upon citizens, investors, developing sovereigns and other lenders, of this remarkably vast and expansive emerging array of options for developing countries in the market for official finance.
Keywords: Debt Sustainability, Debt Trap Diplomacy, Belt and Road Initiative, China-Africa, Debt Trap
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