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Developing Countries Face "Tidal Wave of Debt Repayments" to China: Report

  • The Australian Lowy Institute reported on May 27, 2025, that developing countries face record debt repayments to China this year, mainly from Belt and Road Initiative loans.
  • This situation arises because China’s large-scale lending during the 2010s peaked around 2016, but repayments are now surpassing new loans due to expiring grace periods.
  • The repayments total about $35 billion in 2025, with $22 billion owed by the poorest 75 countries, which risks cutting budgets for health, education, and climate programs.
  • Riley Duke, the author of the report, explained that developing nations are facing a large and increasing burden of loan repayments and interest payments to China, which is transitioning from being a major lender to primarily acting as a debt collector.
  • This shift may strain public finances and raise geopolitical concerns, though Chinese authorities deny creating debt traps and emphasize adherence to international norms.
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investment-international.com broke the news in on Tuesday, May 27, 2025.
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