7 Countries with Largest Debt to China; Is Indonesia Among Them?

TEMPO.CO, Jakarta - Over the past two decades, China has provided significant loans to developing countries to support public and private sector projects through its Belt and Road Initiative (BRI). President Xi Jinping launched his signature foreign policy in 2013 intending to invest in nearly 70 countries and international organizations.

A study found that China's BRI has resulted in dozens of low and middle-income countries being trapped in hidden debt totaling US$385 billion, or Rp5,984 trillion at an assumed rate of Rp15,544 per US dollar. The funds are typically used to finance the construction of ports, railways, and land infrastructure.

According to AidData, an international development research center based at William & Mary's Global Research Institute, China contributed to 13,427 projects worth US$843 billion across 165 countries over the past 18 years until 2017. 

Citing from The Nation Thailand, Forbes said that 97 countries are under Chinese debt according to data collected by the World Bank. Most of the countries with large debts to China are in Africa, and some are in Central Asia, Southeast Asia, and the Pacific.

Low-income countries owe 37 percent of their debt to China in 2022, compared with just 24 percent in bilateral debt to the rest of the world. 

The following is a list of seven countries with the largest debt to China:

1. Pakistan

Pakistan has a $77.3 billion debt to China. Under the China-Pakistan Economic Corridor (CPEC) initiative, China has invested heavily in various infrastructure projects in Pakistan. While the projects are intended to spur development, concerns have arisen about the country's capacity to repay its debt.

2. Angola

The southern African nation of Angola is one of China's largest African clients, owing Beijing US$36.3 billion for its infrastructure projects and domestic oil industry.

3. Ethiopia

Ethiopia agreed to receive US$7.9 billion in loans from China. According to Reuters, China committed to providing US$13.7 billion in loans by 2020, but around half of that amount has been recorded and it is unclear when the debt will pay off.

4. Kenya

Kenya owes a total of US$7.4 billion to China. The loans from China surged in the early years of Uhuru Kenyatta's 2013-2022 administration when current Kenyan President William Ruto approved credit for the construction of a Standard Gauge Railway (SGR) project which connects the Port of Mombasa to the capital Nairobi.

5. Sri Lanka

In May 2022, Sri Lanka defaulted on its debt to China which reached US$6.8 billion. As a result, Sri Lanka had to hand over its southern port of Hambantota to China on a 99-year lease.

6. Maldives

According to statistics released by the Maldives Ministry of Finance, the country's debt to China increased to US$6.39 billion at the end of the first quarter of 2022, or 113 percent of its Gross Domestic Product (GDP). Projects funded by China include the Sinamale Bridge and airport development.

7. Bangladesh

Bangladesh has a US$4 billion debt to China. According to the website of the Chinese Embassy in Bangladesh, the loans were used to support its infrastructure development and industries, such as the Dasherkandi STP Project, the Info-Sarker-Phase-3 Project, the Multi-Lane Tunnel under the Karnaphuli River project, and the Rajshahi Surface Water Treatment Plant.

How about Indonesia?

According to the Indonesia External Debt Statistics (SULNI) data released by Bank Indonesia (BI), Indonesia's loans to China reached US$27.08 billion as of November 2023. However, the data does not explain the amount of debt that has been paid off and is still running.

MELYNDA DWI PUSPITA

Editor's Choice: 10 Countries with the Highest IQ Scores in the World

Click here to get the latest news updates from Tempo on Google News