China’s emergence as a global economic powerhouse has been accompanied by its role as a leading international creditor, particularly through the Belt and Road Initiative (BRI). Launched in 2013, the BRI funds infrastructure projects worldwide, fostering connectivity but also sparking debates over debt sustainability. While these investments address critical development gaps, concerns about “debt-trap diplomacy” and opaque lending terms have placed several nations under financial strain. Below, we explore 30 countries grappling with significant debt obligations to China, analyzing their unique challenges and the broader implications of this lending landscape.
1. Pakistan
Pakistan’s $30 billion debt to China stems largely from the China-Pakistan Economic Corridor (CPEC), a flagship BRI project. Despite infrastructure gains, repayment pressures have pushed Pakistan to seek IMF bailouts. Critics argue that CPEC’s terms favor Chinese firms, exacerbating fiscal imbalances.
2. Sri Lanka
Sri Lanka’s $1.4 billion Hambantota Port debt led to a controversial 99-year lease to China in 2017. The crisis underscored fears of asset seizures, though Sri Lanka’s broader debt woes involve multiple creditors.
3. Djibouti
With debt exceeding 70% of GDP, Djibouti hosts China’s first overseas military base. Loans for ports and railways have raised concerns about sovereignty and repayment capacity in this strategically located nation.
4. Laos
A $6 billion high-speed rail project ballooned Laos’ debt to 65% of GDP. The landlocked nation now faces recession risks, with China owning majority stakes in key utilities.
5. Maldives
Chinese loans funded bridges and airports, but debt repayments consume 25% of the Maldives’ revenue. A recent government shift has prompted renegotiations to avoid default.
6. Angola
As Africa’s second-largest oil producer, Angola borrowed heavily against future oil shipments. Post-2014 oil price crashes left it restructuring $21 billion in Chinese debt.
7. Ethiopia
The $4 billion Addis Ababa-Djibouti Railway symbolizes Ethiopia’s BRI ties. However, civil conflict and default risks have stalled repayments, complicating China’s stance as a lender.
8. Zambia
Zambia defaulted on 17billionexternaldebtin2020,with17billionexternaldebtin2020,with6 billion owed to China. After prolonged talks, a 2023 restructuring deal eased pressures, highlighting coordination challenges among creditors.
9. Kenya
Kenya’s $4.7 billion Standard Gauge Railway (SGR) has yet to turn a profit. Debt consumes over 60% of revenue, forcing austerity measures and tax hikes.
10. Venezuela
Though primarily indebted to Western bondholders, Venezuela’s $60 billion oil-backed loans from China remain contentious. Production collapses and U.S. sanctions have stalled repayments.
11. Mongolia
Mining-dependent Mongolia owes $3.8 billion to China. Currency volatility and COVID-19 setbacks have strained its ability to service loans tied to infrastructure.
12. Cambodia
BRI projects like highways and airports have pushed Cambodia’s debt to 37% of GDP. Critics allege loans entrench Chinese influence, including naval access.
13. Nepal
Nepal’s $2.5 billion BRI commitments focus on hydropower and roads. Fears of replicating Sri Lanka’s crisis have sparked debates over loan transparency.
14. Myanmar
The Kyaukpyu Port and pipelines project, costing $1.3 billion, stalled post-coup. Myanmar’s political isolation complicates repayment prospects.
15. Tajikistan
In 2011, Tajikistan ceded 1,158 km² of land to China to settle debts. Mining and transport loans keep its external debt at 40% of GDP.
16. Republic of Congo
Oil-backed loans comprise 40% of Congo’s $6 billion debt. Falling oil revenues prompted China to extend repayment periods in 2022.
17. Ghana
Ghana’s $2 billion bauxite-for-loans deal with China faces environmental and fiscal criticism. Debt now exceeds 80% of GDP, triggering IMF assistance.
18. Nigeria
Nigeria’s $4 billion loans finance railways and ports. With debt servicing consuming 96% of revenue, austerity looms amid currency crises.
19. Sudan
Post-South Sudan’s secession, China restructured $1.5 billion in loans backed by dwindling oil. Political instability and U.S. sanctions hinder recovery.
20. Zimbabwe
Zimbabwe’s $2.6 billion debt to China includes controversial military loans. Economic collapse and sanctions have led to protracted defaults.
21. Ecuador
Between 2009–2017, Ecuador borrowed $18 billion from China, primarily for oil projects. Renegotiations post-2020 have deferred payments amid environmental backlash.
22. Bolivia
Bolivia’s $2 billion Chinese loans fund highways and lithium mining. Falling mineral prices and political turmoil threaten repayment capacity.
23. Iraq
Iraq owes $10 billion to China for reconstruction projects. Oil price volatility and corruption allegations complicate this partnership.
24. Malaysia
The East Coast Rail Link (ECRL) saw Malaysia renegotiate terms in 2019, reducing costs by 33%. The move reflects growing scrutiny of BRI terms.
25. Belarus
Belarus’ $8 billion debt includes loans for industrial parks and a vehicle plant. Sanctions over the Ukraine war have strained repayments.
26. Ukraine
Pre-2022, Ukraine borrowed $3 billion for agriculture and energy. The ongoing conflict with Russia has frozen repayment discussions.
27. Argentina
Argentina relies on Chinese currency swaps to stabilize reserves. While not traditional debt, these instruments deepen financial interdependence.
28. Kyrgyzstan
Energy and transport projects have pushed Kyrgyzstan’s debt to 50% of GDP. Fears of asset seizures persist, particularly over strategic infrastructure.
29. Tonga
Tonga’s $160 million debt to China equals 40% of its GDP. Cyclones and COVID-19 have delayed repayments, prompting calls for debt relief.
30. Seychelles
In 2018, Seychelles restructured $72 million in Chinese debt through environmental swaps, a model praised for balancing fiscal and ecological goals.
The Dual Edges of Chinese Lending
China’s loans have undeniably addressed infrastructure gaps, yet the opacity of terms and collateral demands—like resource concessions or strategic assets—fuel criticism. While defaults are rare, cases like Sri Lanka and Zambia reveal the fragility of debt-driven growth.
The G20’s Common Framework aims to improve creditor coordination, but China’s preference for bilateral deals complicates solutions. Meanwhile, Beijing has begun emphasizing “green” BRI projects and debt relief, signaling a shift in response to global scrutiny.
For debtor nations, the challenge lies in balancing development needs with fiscal prudence. As the world navigates an era of overlapping crises, the sustainability of China’s lending model—and its impact on global economic stability—remains a pivotal question.
Note: Debt figures and percentages are approximate and based on the latest available data (2023). The list highlights significant cases but is not exhaustive.
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