Thursday, April 27, 2023

Study Debunks Charges of China's Debt Trap Diplomacy

 Boston University Global Development Policy Center published in April 2023 a study titled "Demystifying Chinese Overseas Lending and Development Finance" by Oyintarelado Moses, Cecilia Springer, and Kevin P. Gallagher.  

The study found no evidence that China lends with the end goal of seizing a strategic public asset or gaining strategic leverage in the event of non-repayment.  Empirical evidence shows that China's overseas lending and development finance is associated with economic growth that benefits host countries.  However, this finance can pose social, environmental, and debt sustainability risks.