China has significantly expanded its bailout lending as its Belt and Road Initiative falters following a series of debt write-offs, scandal-ridden projects and allegations of corruption, reports the Financial Times. A study published on Tuesday shows China granted $104 billion worth of rescue loans to developing countries between 2019 and the end of 2021. The figure for these years is almost as large as the country’s bailout lending over the previous two decades.
The study by researchers at AidData, the World Bank, the Harvard Kennedy School and the Kiel Institute for the World Economy is the first known attempt to capture total Chinese rescue lending on a global basis.
Between 2000 and the end of 2021, China undertook 128 bailout operations in 22 debtor countries worth a total of $240 billion. China’s emergence as a highly influential “lender of last resort” presents critical challenges for the western-led institutions such as the IMF, which have sought to safeguard global financial stability since the end of the second world war.
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