In late 2013, China launched the Belt and Road Initiative (BRI)—a sweeping plan to promote infrastructure development across Africa, Asia, and Europe with Chinese financing. From 2014 through 2017, China’s peak lending years, loans totaling over $120 billion backed projects ranging from highways to railroads to power plants. China hoped that these funds would spur growth in its near abroad, expand its exports and access to land-based and maritime transport facilities, boost its manufacturing and construction firms, and strengthen its economic, political, and military influence abroad. Yet if the investments failed to generate sufficient returns, they might also boost debt levels unsustainably and create political frictions with China.
The CFR Belt and Road Tracker aids analysis of BRI by showing how, during China’s most active years of lending, the initiative changed countries’ bilateral economic relationships with China over time. The tracker focuses on three Belt and Road indicators—imports from China, foreign direct investment (FDI) from China, and external debt to China—for sixty-seven participant countries. Select the indicator you wish the map to display using the drop-down menu above the map. For each indicator, the darker the shade of red the stronger a country’s economic ties to China. To view changes over time, adjust the date using the slider above the map.
For each country, the latest data for all indicators can be seen by hovering over the country on the map. This information is also displayed on each country’s profile, which can be found below the map. The drop-down menu above the profiles lets you select groups of countries for display. You can create a custom list of countries to view or select any of the seven corridors into which China has grouped Belt and Road countries.
Each country’s profile displays the selected indicator’s value from 2000 through 2017, the final year of BRI’s heyday. After then, China significantly curtailed its outbound lending. Between 2009 and 2017, China’s two largest development banks—the Chinese Development Bank and the Export-Import Bank of China—made more loans abroad than the World Bank in each year but one. In 2018, those banks’ loans plunged roughly three-fourths from the year before. Poor economic conditions in borrower countries, unsustainably rising BRI debts, and slowing domestic growth all pushed China to scale back the initiative. Still, Chinese lending before the pullback had lasting effects on many borrowers’ relationships with China—and, for some countries, on overall macroeconomic stability.
The definitions of each Belt and Road indicator, and major trends that each highlights, are as follows:
The imports indicator uses data from the International Monetary Fund (IMF) to measure countries’ goods imports from China as a percentage of their gross domestic product (GDP). This indicator can be used to gauge China’s success in using BRI to raise demand for its exports. Following 2013, goods purchases from China spiked particularly in Middle Eastern and African countries.
The foreign direct investment indicator uses IMF data to measure the proportion of countries’ total inward FDI that comes from China. A greater Chinese share of FDI implies greater Chinese influence over domestic economic activity. For many countries, Chinese FDI has remained low; yet by 2017, some, such as Mongolia and Kyrgyzstan, received over a quarter of their inward FDI from China.
The CFR Index of Debt to China is our estimate of countries’ stocks of external debt to China as a percentage of their GDP. Index values are based on our analysis of government announcements and media reports about Chinese development loans to Belt and Road countries. (More information about the index calculations is in the methodology section below.) The index can be used to gauge a country’s vulnerability to defaulting on Chinese debt, an eventuality which may result in China taking ownership of infrastructure—as it did with a Sri Lankan port in 2017. Debt to China soared for many countries after 2013: in some, such as Cambodia and Laos, it came to surpass 20 percent of GDP.
Please also visit our Global Monetary Policy Tracker, Sovereign Risk Tracker, Global Imbalances Tracker, and Central Bank Currency Swaps Tracker. To learn more about the Belt and Road Initiative, you can visit CFR’s Belt and Road backgrounder.
Methodology for the CFR Index of Debt to China
The CFR Index of Debt to China uses publicly available sources to construct a conservative, lower-bound estimate of countries’ stocks of external debt to Chinese creditors. The index includes debts from three different types of Chinese investment: foreign direct investment, portfolio investment, and development loans. These debts are calculated as follows:
Foreign direct and portfolio investment: The index includes countries’ stocks of these debts to China if the IMF Coordinated Direct Investment Survey, the IMF Coordinated Portfolio Investment Survey, or official country sources report them. Otherwise, the index includes no FDI or portfolio debts.
Development loans: The index uses government announcements, media reporting, or other third-party sources to identify Chinese development loans issued to BRI countries from 2000 through 2017. To capture only loans that were being disbursed, and were not merely promised, the index includes loans only when sources reported that a final loan agreement was signed, or when circumstantial evidence strongly suggests that this is the case. A loan is not included if it was only pledged or agreed upon in a memorandum of understanding. Lines of credit from China to other nations are not included unless there is evidence that borrowers drew upon such lines.
In some cases, the index makes estimates about the principal values, disbursal schedules, and repayment schedules of confirmed development loans. Estimates are based on factors including the total cost of the development project, other loans for similar development projects, or other loans to the same country. When the financial close date of the loan is ambiguous, the index assumes that the loan began in the year construction began. The index also assumes that loan repayment occurs uniformly across the loan’s tenor and on schedule unless otherwise reported.
Data sources: The index draws upon documentation by AidData at the College of William and Mary, the Export-Import Bank of the United States, the Center for Strategic and International Studies, the Export-Import Bank of China, the China Africa Research Initiative at Johns Hopkins University’s School of Advanced International Studies, country governments, multilateral development banks, and third-party media sources to identify Chinese development loans. GDP data comes from the IMF. Index data for Indonesia after 2007 comes from Indonesian government statistical releases.