Poorest nations face record debt repayments to China, report warns
A new report from the Lowy Institute warns that the world’s poorest nations are facing record debt repayments to China, with $22 billion due in 2025 from 75 low-income countries. The report states that China’s role is shifting from lender to debt collector, creating financial strain for countries already struggling with economic pressures. The total global repayment figure is estimated at $35 billion, with the majority owed to China.
Much of this debt stems from loans issued under the Belt and Road Initiative (BRI), China’s global infrastructure program. While the BRI enabled development in countries with limited access to financing, it has also sparked concerns over debt sustainability and Chinese political influence. Critics argue that China’s lending practices have led to debt traps, though Beijing denies such claims.
The report highlights that debt repayments are diverting resources from essential services like health, education, and climate initiatives. It also notes new loans to countries that recently shifted diplomatic ties from Taiwan to China, including Honduras and the Solomon Islands.
As China faces its own economic challenges, it is caught between international calls for debt relief and domestic pressure to recover funds. Analysts believe actual debt figures may be higher due to limited transparency in China’s lending data.
