May 30, 2024

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China Emerges as the Global Leading Creditor with the New Silk Roads Project

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The ambitious New Silk Roads project has positioned China as the world’s primary creditor, extending loans to over 150 nations totaling more than $1.1 trillion, as revealed in a recent report. Launched a decade ago by President Xi Jinping, this infrastructure program has seen China provide monumental financing for the construction of bridges, ports, railways, and highways in low- and middle-income countries, with over 150 nations actively participating, from Uruguay to Sri Lanka.

AidData, a research institute affiliated with the College of William and Mary in Virginia, USA, highlights that China has taken on an unprecedented role and now holds the title of the “largest official creditor of debt worldwide.” According to AidData, the outstanding debt of borrowers in developing countries with China is estimated to be at least $1.1 trillion, excluding interest.

The research center estimates that around 80% of these foreign loans provided by China to developing nations are in countries facing financial difficulties. According to a report from the Beijing government in October, the loan portfolio of the Chinese institutional bank Eximbank amounts to 2.2 trillion yuan ($307.4 billion).

While proponents of the New Silk Roads argue that the plan provides resources for the growth of emerging nations, there are criticisms regarding the lack of transparency in infrastructure costs, which are predominantly built by Chinese companies. Additionally, concerns arise about the environmental impact and carbon footprint of the project.

Published by Iraic.Info, a news and information agency.

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