China’s Overseas Lending

Sebastian Horn, Carmen Reinhart and Christoph Trebesch

No 11, Working Papers from German Research Foundation's Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour", Humboldt University Berlin

Abstract: Compared with China's pre-eminent status in world trade, its role in global finance is poorly understood. This paper studies the size, characteristics, and determinants of China's capital exports building a new database of 5000 loans and grants to 152 countries, 1949-2017. We find that 50% of China's lending to developing countries is not reported to the IMF or World Bank. These "hidden debts" distort policy surveillance, risk pricing, and debt sustainability analyses. Since China's overseas lending is almost entirely official (state-controlled), the standard "push" and "pull" drivers of private cross-border flows do not apply in the same way.

Keywords: China; trade finance; external debt; international capital flows; official lending; hidden debts; sovereign risk; Belt and Road initiative (search for similar items in EconPapers)
JEL-codes: F21 F34 F42 F6 G15 H63 N25 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cna and nep-opm
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https://www.econstor.eu/bitstream/10419/223192/1/SPPWP-11.pdf (application/pdf)

Related works:
Journal Article: China's overseas lending (2021)
Working Paper: China's Overseas Lending (2019)
Working Paper: China’s Overseas Lending (2019)
Working Paper: China's overseas lending (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:pp1859:11

DOI: 10.18452/20585.2

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