Soaring debt repayments and a sharp reduction in lending have transformed China’s role in developing country finances from capital provider to debt collector. Mounting pressures from Chinese debts are especially severe for many of the world’s poorest and most vulnerable countries. A retrenchment in Western aid and trade is compounding these challenges while undermining any geopolitical advantage for the West. 

Key findings

• In 2025, the world’s poorest and most vulnerable countries will make record high debt repayments totalling $22 billion to China.
• China continues to finance strategic and resource-critical partners despite a broader collapse in its global lending.
• China is grappling with growing diplomatic pressure to restructure unsustainable debt, and mounting domestic pressure to recover outstanding debts.
• A retrenchment in Western aid and trade is compounding difficulties for developing countries while squandering any geopolitical advantage for the West.