Chinese BRI debt repayments to reach $22 billion in 2025.
China is set to collect a record $22 billion in loan repayments from the Belt and Road Initiative (BRI) in 2025. China is set to transition from being a capital provider to a debt collector for 75 developing countries, which include some of the world’s poorest and most vulnerable nations, this year. These countries are scheduled to repay a record USD 22 billion in loans owed to Beijing, as reported by an Australian think tank.
China has emerged as the foremost debt collector among developing nations, transitioning from a net capital provider, “as bills coming due from its Belt and Road lending surge in the 2010s now far outstrip new loan disbursements,” according to the latest research report from the Australian think tank, the Lowy Institute. In 2025, approximately 75 of the world’s poorest and most vulnerable countries are projected to face unprecedented debt repayments amounting to USD 22 billion to China, a consequence of peaks in new loan commitments made between 2012 and 2018, according to the report.
China is confronted with a dilemma and increasing diplomatic pressure to address its unsustainable debt, alongside rising domestic demands, especially from its quasi-commercial institutions, to recoup outstanding debts, as outlined in the report by Riley Duke. Duke stated that the research is being published at this time due to the fact that China’s Belt and Road Initiative (BRI) lending spree reached its peak in the mid-2010s, with grace periods starting to expire in the early 2020s, indicating a probable crunch period for developing countries’ repayments to China. The implications of China’s transition to a primary debt collector on its standing as a development partner are yet to be determined, the Hong Kong-based South China Morning Post quoted Duke as saying. A significant portion has secured new Chinese loan commitments since 2019, collectively representing a quarter of all disbursements since the onset of China’s lending downturn in 2018, Duke noted.
On Tuesday, the Chinese Foreign Ministry attempted to mitigate the impact of the report, asserting that a small number of countries are disseminating unfounded claims regarding Chinese loan assistance to developing nations. During a media briefing, Foreign Ministry spokesperson Mao Ning stated that China’s investment and financing cooperation with developing countries aligns with international common practices, market principles, and the principle of debt sustainability, in response to the report.
A few nations are disseminating rumors, referencing the threat posed by China, yet they neglect to mention that multilateral institutions serve as the primary creditors for developing countries and are the origin of debt repayment, she said. Through its prominent BRI initiative, a hallmark of President Xi Jinping’s leadership, China has allocated billions of dollars in loans to numerous infrastructure projects across developing nations, thereby enhancing its global influence.
However, the investments faced scrutiny for potentially being debt traps following China’s acquisition of Sri Lanka’s Hambantota port through a 99-year lease as part of a debt swap. Numerous recipient nations faced challenges in repaying the loans for the projects, particularly in the aftermath of the COVID-19 pandemic, which exacerbated the economic crisis and diminished the viability of the initiatives.
According to the report, in 54 of 120 developing countries for which data is available, debt-service payments to China currently surpass the total repayments owed to the Paris Club, a group that encompasses all significant Western bilateral lenders. The research indicated that China continues to be the largest bilateral lender to seven of its nine land neighbors: Laos, Pakistan, Mongolia, Myanmar, Kazakhstan, Kyrgyzstan, and Tajikistan.
In the previous year, China emerged as Pakistan’s largest creditor, with nearly USD 29 billion in loans, as reported by the World Bank, highlighting the deep financial ties between the two nations, particularly given Beijing’s status as Islamabad’s all-weather ally. China held the largest proportion of debt to Pakistan, accounting for 22pc (approximately USD 28.786bn), followed by the World Bank with an 18pc share (USD 23.55bn) and the Asian Development Bank at 15pc (USD 19.63bn), it said. This year, Pakistan faces considerable debt rollover and repayment obligations, with projections indicating that external debt maturing could range from USD 22 billion to over USD 30 billion. In March, Beijing, which is pursuing a USD 60 billion China-Pakistan Economic Corridor (CPEC), rolled over a USD two billion loan for Pakistan, marking one of several such rollovers in recent years.
China, grappling with its own economic slowdown, has adjusted its future BRI investments, shifting focus from large-scale projects to smaller, yet aesthetically pleasing initiatives. The BRI, proposed by China in 2013, seeks to establish a trade and infrastructure network that links Asia with Europe, Africa, and beyond.
