The Chinese-financed effort to build a national railway through Laos is a quintessential project of the Belt and Road Initiative.
CGD Policy Blogs
CGD research has become Exhibit A virtually every time the charge of “debt trap diplomacy” has been leveled against China in the media this past year. Yet, our research shows that many of China’s borrowers are managing their debts just fine and seem unlikely to fall into any traps.
In most developing countries, China's role as a creditor is modest—but in eight of the most debt vulnerable countries, Chinese lending is significant and growing fast.
In a new CGD paper, we assess the likelihood of debt problems in the 68 countries we identify as potential BRI borrowers. The big takeaway: BRI is unlikely to cause a systemic debt problem, yet the initiative will likely run into instances of debt problems among select participating countries—requiring better standards and improved debt practices from China.