Why China Should Boost its Lending To Developing Countries
China's retreat from lending to developing countries has come at precisely the wrong time for the global economy.
China's Premier Li Qiang attends a G20 Leaders' Summit plenary session during the G20 Johannesburg Summit, November 22, 2025. Credit: G20 SA via Flickr
For the past two decades Chinese development finance has filled major energy and infrastructure gaps in the global South, helping to fuel economic growth. However, COVID-19 and other woes within China have collided with increasing levels of debt distress among borrowing nations, reversing the promising growth of Chinese finance. To make matters worse, finance from the West has also decreased, especially from the private sector.
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