Chinese Financing to Latin America Fell to Zero in 2020, Providing a Cautionary Tale For Africa and Other Developing Regions

There’s new evidence of the dramatic plunge in Chinese overseas development finance. Researchers in the United States found that for the first time in more than a decade, China’s two largest policy banks, the China Development Bank and the China Exim Bank, did not lend any money for projects in the Latin America and Caribbean region.

Lending will likely never return to pre-pandemic levels, concluded the authors of a new report on the issue published The Dialogue and Boston University’s Global Policy Development Center. And the reasons for the curtailment of loans to Latin America overlap with what’s happening in Africa.

What’s Behind the Fall in Chinese Overseas Development Finance?

  • BAD LOANS: The Chinese extended tens of billions of dollars of loans to Venezuela,  which is effectively now in default. With oil prices still relatively low, China’s policy banks are in no mood no to pour good money after bad. There are some interesting similarities here with the Chinese situation in Angola.
  • BELT & ROAD: China is focusing less attention on large, expensive infrastructure and energy projects and more on leaner Health Silk Road and Digital Silk Road initiatives. This too is also playing out in Africa (examples: the new COVID-19 vaccine air bridge and the soon to be completed PEACE internet cable linking Asia and Africa).

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The post Chinese Financing to Latin America Fell to Zero in 2020, Providing a Cautionary Tale For Africa and Other Developing Regions appeared first on The China Africa Project.



source https://chinaafricaproject.com/2021/02/23/chinese-financing-to-latin-america-fell-to-zero-in-2020-providing-a-cautionary-tale-for-africa-and-other-developing-regions/

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