28 Jan
2021
China Lecture Series
China’s Overseas Lending
13:00
–
14:00
© iStock / Maxiphoto
This lecture series is co-organized by the Centre for Modern East Asian Studies at the University of Göttingen and the Kiel Institute China Initiative.
Speaker: Sebastian Horn (LMU München)
Compared with China’s pre-eminent status in world trade, its role in global finance is poorly understood. This paper studies the size, characteristics, and determinants of China’s capital exports building a new database of 5000 loans and grants to 152 countries, 1949-2017. We find that 50% of China’s lending to developing countries is not reported to the IMF or World Bank. These “hidden debts” distort policy surveillance, risk pricing, and debt sustainability analyses. Since China’s overseas lending is almost entirely official (state-controlled), the standard “push” and “pull” drivers of private cross-border flows do not apply in the same way.
