China’s lending to developing nations has slowed sharply over the past decade, while debt repayments to Beijing continue to rise, leaving some countries sending more money out than they receive in new loans.
China’s role as a leading financier to developing nations has undergone a notable shift, with new loans to poorer countries dropping significantly while repayments on existing debt continue to grow, according to the inaugural report by the ONE Data initiative. The analysis found that many low- and middle-income countries — particularly in Africa — are now transferring more funds to China in debt payments than they are receiving in fresh financing from the world’s second-largest economy.
The change has coincided with a surge in net financing from multilateral institutions, which have emerged as the main source of development finance once debt-service outflows are considered. Multilateral lenders increased net financing by 124% over the past decade, now providing 56% of net flows, equivalent to $379 billion between 2020 and 2024.
“The fact that there’s less lending coming in, but that previous lending from China still needs to be serviced — that’s the source of the outflows,” said David McNair, executive director at ONE Data. Africa experienced the largest impact in the 2020-24 period, with net flows swinging from an inflow of $30 billion in 2015-19 to an outflow of $22 billion.