China’s Overseas Lending

Delivering sustainable economic growth
Posted Jul 09, 2019 | National Bureau of Economic Research, Sebastian Horn, Carmen Reinhart, Christoph Trebesch

While China’s dominant footprint in world trade is well known, its expanding role in global finance is poorly documented. Many of these financial flows are official, undertaken by the Chinese government, state-owned companies or the state-controlled central bank, and are not reported to the IMF, the BIS or the World Bank. In this working paper of the National Bureau of Economic Research, Sebastian Horn, Carmen Reinhart, and Christoph Trebesch explore the size, destination, and characteristics of China’s global capital flows. Their assessment of 1,974 Chinese loans and 2,947 Chinese grants to 152 countries from 1949 to 2017 reveals that about one half of China’s overseas loans to the developing world are “hidden”. These “hidden debts” to China distort the risk assessment in policy surveillance and the market pricing of sovereign debt.


https://www.nber.org/papers/w26050.pdf

 

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