As we explained in Foreign Affairs on April 27, China is trying quietly to exempt its massive Belt and Road Initiative (BRI) infrastructure loans to poor countries from its agreement to participate in the G20 moratorium on debt-collection through the end of the year.
While the World Bank is disbursing emergency aid to its poorest borrowers, China—a major World Bank borrower, with $16 billion in outstanding loans—continues, effectively, to use cheap World Bank financing to fund its own higher-interest loans to other World Bank borrowers. As the graphic above shows, Pakistan, South Africa, and Ethiopia owe China considerably more than they owe the World Bank. Although China’s BRI loans are shrouded in secrecy, we estimate outstanding BRI debt in 67 countries we were able to track through 2017 at at least $135 billion. Given that more countries have signed on since then, total outstanding BRI debt is probably nearer to the $196 billion owed to the World Bank.
Given the scale of BRI debt and the horrific impact of the COVID-19 pandemic in poor nations, China has a moral obligation to join the G20 moratorium in full—including its BRI loans.