A new report published by the AidData research lab at Virginia’s College of William & Mary sheds some light on the usually nontransparent practice of Chinese bilateral emergency loans. The researchers that also hail from the World Bank, Harvard University and the Kiel Institute for the World Economy identified 22 countries that were bailed out by Chinese loans when they ran into liquidity problems between 2000 and 2021.
Countries that utilized these loans in an especially high number of years, i.e. rolled over their loans into subsequent years include Pakistan, Mongolia, Argentina and Sri Lanka. The latter country tapped China’s central bank for the first time in 2021 before defaulting on its debt anyways in 2022. Argentina and Mongolia were also identified by the report as countries that have been in dire financial distress since the early 2010s and were using China as a lender of last resort despite the country’s loan terms being less favorable than lower-interest bailouts offered by the IMF or the U.S. Fed. The list of Chinese bailouts also includes countries experiencing major inflation events, like aforementioned Pakistan, Turkey and Egypt.
Energy News Beat