Podcast: The Plunge in China’s Overseas Lending
China Africa Project
Getting a loan from one of China’s two largest policy banks is significantly more difficult than it was just a couple of years ago. According to data from Boston University’s Global Development Policy Center, lending by the China Development Bank and the China Exim Bank plunged 94% from $75 billion in 2016 to just $4 billion in 2019.
This is a dramatic shift given that these two banks alone over the past 20 years have lent nearly as much as the World Bank.
BU’s findings have generated quite a bit of discussion and while other analysts may disagree with some of their results, most share their conclusion that Chinese policy bank lending has indeed fallen precipitously with no indication as to if or when it’ll rebound.
Kevin Gallagher, director of the Global Development Policy Center, and Rebecca Ray, a senior academic researcher there were among the leads who helped to build the new interactive database that tracks Chinese policy bank lending around the world. They both join Eric & Cobus from Boston to discuss their research and why Beijing is now far more judicious with its loans.
- Rhodium Group: China’s Belt and Road: Down but not Out by Matthew Mingey and Agatha Kratz
- The Financial Times: China curtails overseas lending in face of geopolitical backlash by Jonathan Wheatley and James Kynge
- Project Syndicate: China Takes the Lead in Development Finance by Kevin Gallagher and Rebecca Ray
About Kevin Gallagher and Rebecca Ray:
Kevin P. Gallagher is a professor of global development policy at Boston University’s Frederick S. Pardee School of Global Studies, where he directs the Global Development Policy Center. Gallagher serves on the United Nations’ Committee for Development Policy and co-chairs the T-20 Task Force on International Financial Architecture at the G-20. He previously served on the investment sub-committee of the Advisory Committee on International Economic Policy at the US Department of State and on the National Advisory Committee at the Environmental Protection Agency. Gallagher has been a visiting or adjunct professor at the Paul Nitze School of Advanced International Studies at Johns Hopkins University, the Fletcher School of Law and Diplomacy at Tufts University; El Colegio de Mexico in Mexico; Tsinghua University in China, and the Center for State and Society in Argentina.
Rebecca Ray is a Senior Academic Researcher at GEGI. She holds a PhD in Economics from the University of Massachusetts-Amherst and an MA in International Development from the Elliott School of International Affairs at the George Washington University. Since 2013, she has focused her GEGI research on Latin America, including the annual China-Latin America Economic Bulletin series, the book project China and Sustainable Development in Latin America: the Social and Environmental Dimension, and her current project, Safeguarding Sustainable Development in the Andean Amazon.