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How China Lends
Report

How China Lends

A Rare Look into 100 Debt Contracts with Foreign Governments



Editorial Rating

9

Qualities

  • Analytical
  • Innovative
  • Eye Opening

Recommendation

China’s portfolio of loans to lesser developed nations puts it at the top of the list of global creditors. Ensuring repayment has led it to include terms advantageous to the lender but onerous to the borrower, as researchers Anna Gelpern, Sebastian Horn, Scott Morris, Brad Parks and Christoph Trebesch found in this cogent analysis. China’s outsized role in sovereign credit provision – and its political motivations – only underscore the overall need for more transparency in sovereign lending. Financial professionals and foreign policy students will find this an illuminating report.

Take-Aways

  • China has lent extensively to governments of low- and middle-income countries.
  • These sovereign borrowers are subject to unusual terms and conditions that potentially give China geopolitical leverage.
  • Sovereign credits should offer greater transparency to citizens and markets.

About the Authors

Anna Gelpern is a professor at Georgetown Law. Sebastian Horn and Christoph Trebesch are economists at the Kiel Institute for the World Economy. Scott Morris is a senior fellow at the Center for Global Development. Brad Parks is the executive director of AidData at the College of William and Mary.