CARI Debt Analysis Outputs since April 2020

Recent analysis by CARI researchers on Chinese lending in Africa

• What we know about China’s approach to debt relief: Insights from two decades of China-Africa debt restructuring, Panda Paw Dragon Claw, August 31, 2020

In assessing China’s approach to debt relief, CARI Research Manager Kevin Acker goes beyond China’s participation in the G-20 Debt Service Suspension Initiative (DSSI) and takes a look at the past two decades of Chinese debt relief. From these scenarios, Acker provides insight as to how China might handle the financial stress of the COVID-19 era. 

• China, the World Bank, and African Debt: A War of Words, The Diplomat, August 17, 2020

David Malpass, World Bank president and a Trump appointee, claimed that China Development Bank was a significant provider of development assistance to the low-income African countries covered by the G-20 Debt Service Suspension Initiative (DSSI) and should join the initiative. In fact, CARI data show that CDB lending in the DSSI countries is relatively small, and it is significant only in Angola. By pointing a finger at CDB, is Malpass deflecting attention from the World Bank’s own failure to join the DSSI? Or is Malpass allowing the rising hostility between the United States and China to add additional challenges to cooperative action over debt debt relief in Africa?

• Did Benn Steil Get it Wrong About China’s Intentions for BRI Debt Relief?, The China Africa Research Initiative Blog, July 18, 2020

Due to the pandemic, the G-20 announced an unprecedented agreement in April to suspend official bilateral debt service payments for the world’s low income countries for the remainder of 2020. The Council on Foreign Relations suggested that China Export Import Bank would not join the DSSI. In this blog post, Deborah Brautigam analyzes the PRC’s intention to live up to its COVID-19 pledge on debt relief, suggesting that the CFR misread Chinese intentions. 

• Risky Business: New Data on Chinese Loans and Africa’s Debt Problem, China Africa Research Initiative Briefing Paper, July 2020

From modest beginnings in 1960, China has recently become a highly visible actor in Africa’s lending landscape. African borrowers have built roads, installed electrical grids, and modernized their airports with Chinese finance. When commodity prices and growth rates began to tumble in 2015, the specter of a new debt crisis arose. This briefing paper discusses CARI’s latest data release on Chinese loan commitments to Africa. 

• Putting a Dollar Amount on China’s Loans to the Developing World, The Diplomat, June 24, 2020

After several years of lacking data on outstanding debts to China among developing countries, Yufan Huang and Deborah Brautigam bring clarity to the subject by elaborating on the World Bank’s recently published debt statistics of 72 low-income nations. From the new numbers, they draw several conclusions based on how much debt these governments have and how much is owed to Chinese lenders. 

• China, Africa, and Debt Distress: Fact and Fiction about Asset Seizures, China Africa Research Initiative Policy Brief, June 2020

In the past two years, news headlines have periodically speculated that African borrowers are at risk of losing their sovereign assets to Chinese lenders. In this policy brief, Deborah Brautigam and Won Kidane explore what is known about the legal aspects of Chinese lending, including waiver of sovereign immunity clauses and the consequences thereof, and provide policy recommendations.

• Debt Relief with Chinese Characteristics, China Africa Research Initiative Working Paper, June 2020

As China is poised to become the world’s largest creditor, concerns about debt sustainability have grown. Yet considerable confusion exists over what is likely to happen when a government runs into trouble repaying its Chinese loans. In this paper, Kevin Acker, Deborah Brautigam, and Yufan Huang draw on CARI data to review the evidence on China’s debt cancellation and restructuring in Africa, in comparative and historical perspective. Cases from Sri Lanka, Iraq, Zimbabwe, Ethiopia, Angola, and the Republic of Congo, among others, point to patterns of debt relief with distinctly Chinese characteristics.

• Chinese Debt Relief: Fact and Fiction, The Diplomat, April 15, 2020

Dr. Deborah Brautigam discusses the increased pressure China is facing to forgive its loans to Africa due to the recent pandemic and how it will react. By drawing upon examples of how China has managed tricky debt situations in the past, Brautigam debunks claims that China will seize assets or that it has written off half of Africa’s debt.

• Is China Hiding its Overseas Lending? Horn, Reinhart and Trebesch’s “Hidden Loans” and Hidden Data, The China Africa Research Initiative Blog, April 1, 2020

This blog post responds to a working paper by Horn, Reinhart, and Trebesch (HRT) about Chinese overseas lending, which states that half of China’s loans to low-income nations are hidden. Deborah Brautigam and Kevin Acker dispute their review of China’s “hidden lending” by comparing it with SAIS-CARI’s data, noticing some numbers have been underestimated and others overestimated. The analysis ends with a discussion about the key difference between loan commitments and loan disbursements, using Nigeria as a case study.