These Low Income Countries Have Received the Most Loans from China
What we’re showing
The top HIPC countries, ranked by the amount of loans they have taken from China.
The IMF’s Heavily Indebted Poor Countries (HIPC) initiative provides relief to qualified nations struggling to invest in health, education, and social services.
Key takeaway
As part of its Belt and Road Initiative, China has provided billions in loans to poor countries in Africa and other developing regions.
Critics refer to this as “debt-trap diplomacy”, in which the lender nation deliberately provides loans to countries it knows are unable to pay, with the hope of gaining political leverage.
These loans are also counterproductive to the IMF’s HIPC initiative. For example, the HIPC relieved Honduras of $556M in debt in 2003, and an additional $1.4B in 2007. Soon after, China began increasing loans to Honduras, including a $298M loan at 4.1% interest in 2014.
Are accusations of “debt-trap diplomacy” legitimate?
- According to the US-China Economic and Security Review Commission, 60% of China’s debtor nations were in financial distress in 2022, up from 5% in 2010.
- Many countries on this list, like the Republic of the Congo, have publicly supported China’s positions in Hong Kong and in the South China Sea.