An American think tank warned on Tuesday in a new report that the world’s poorest countries are facing a “tidal flood of loan” as China’s payment hit record peaks in 2025. Shipping ports, railroads, roads, and other items from Africa’s deserts to the subtropical South Pacific has been funded by China’s Belt and Road Initiative borrowing spree in the 2010s. However, new borrowing is drying up, according to Australia’s Lowy Institute, and is now being weighed by bills that developing nations must give up. Researchers Riley Duke said that “developing states are grappling with a tidal wave of loan payment and interest charges to China.” China will then serve as a businessman to the developing world, and will do so for the rest of the ten years. The Lowy Institute compared the World Bank‘s data to determine developing countries ‘ payment obligations. According to the report, the 75 poorest nations will “record higher debt payments” of a combined US$ 22 billion be scheduled to be made to China in 2025. Due to this,” China’s online banking location has rapidly changed,” Duke said. ” Being a online service of financing, where it lent more than it received in repayment, to a online drain, with repayments then exceeding loan disbursements,” the statement states. According to the Lowy report, paying off debts was beginning to put pressure on spending on hospitals, schools, and climate change. ” Developing economies are under enormous financial strain due to the pressure from Chinese state lending, along with the escalating repayments to a number of international private creditors.” Additionally, the report raised questions about whether China might attempt to use these debts as “geopolitical leverage,” especially after the United States cut foreign aid. The report noted that there were two areas that appeared to be bucking the trend, despite the report’s claim that Chinese lending was almost entirely declining. The first was in nations like Honduras and the Solomon Islands, which both received significant new loans after transferring from Taiwan to China as diplomats. The other was in nations like Brazil and Indonesia, where China has entered new loan agreements to secure battery metals or other important minerals.
