Recent commentary on the debt burden of #CPEC by @State_SCA is part of a wider set of narratives about the vitality of Chinese infrastructure investments through the Belt & Road Initiative.

@tabadlab Fellow Umar Nadeem examines the data https://www.tabadlab.com/publications/first-response/belt-road-initiative-bri-belted-on-a-road-to-debt/

Research from @rhodium_group reviewed forty cases of external debt renegotiations by China. It concludes that while debt distress is common among countries receiving high levels of financing for rapid infrastructure expansion, asset seizures by China are extremely rare.

Despite being a creditor enjoying quite a strong position, China often ends up restructuring loan terms and even offering wholesale re-financing.

Interestingly, write-offs, both partial and full, have been the most common solution to debt problems in these negotiations.

Conclusion:

China’s interest in making the BRI a success has fueled speculation of debt-traps caused by unsustainable debt financing. While the sustainability of infrastructure financing is critical, there is little evidence that China is forcing countries into such crises.

Full paper (PDF)

https://www.tabadlab.com/wp-content/uploads/2019/05/Tabadlab-First-Response-China-BRI-Debt.pdf