China Shifts Focus from Infrastructure Loans to Debt Rescues for Struggling Countries
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China has shifted from lending for infrastructure to providing emergency debt rescues. Rescue loans were 58% of lending in 2021, up from 5% in 2013.
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Loans were initially for the Belt and Road Initiative, but many countries are now unable to repay.
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Recent lending is from China's central bank to other central banks and Chinese commercial banks partnering with Western banks.
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The US has tried to match China's lending through its International Development Finance Corporation.
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Chinese lenders built rapidly but often lacked environmental and financial reviews. Countries struggle with debt from guaranteed loans.