China outspending U.S. and Japan in overseas development finance, study shows

xizhimen · Sep 29, 2021

China outspending U.S. and Japan in overseas development finance, study shows

KYODO
Sep 29, 2021

WASHINGTON – China’s annual average spending on overseas development projects showed “a dramatic expansion” to $85 billion in the five-year period from 2013, far outpacing the outlays by the United States, Japan and other major powers, a study by U.S. research lab AidData showed Tuesday.

The year 2013 is when Chinese President Xi Jinping advocated the Belt and Road Initiative to increase Beijing’s influence abroad by financing and building infrastructure projects across Asia, Europe and Africa.

The report, which described Beijing’s grant-giving and lending activities as “shrouded in secrecy,” also revealed that Chinese development projects have been financed with debt rather than aid, and that most Chinese overseas lending is provided on less generous terms than from traditional bilateral and multilateral creditors.

AidData studied more than 13,400 projects worth $843 billion across 165 countries over the past nearly 20 years.

The report was released at a time when the Group of Seven major industrialized nations, which includes the U.S. and Japan, is seeking to counter China’s BRI through the launch of its own version of infrastructure projects for the developing world. The initiative has been criticized for a lack of transparency, poor environmental and labor standards, and saddling developing countries with debt.

“For quite some time it has been known that China and the United States were overseas spending rivals. What was not known is that since the introduction of the Belt and Road Initiative, China is really no longer a rival of the United States, it’s now outspending the United States, as well as other major powers, on a two-to-one basis or more,” Bradley Parks, executive director of AidData, said.

Between 2000 and 2012, the average annual development finance commitments from Beijing amounted to $32 billion and those commitments from Washington were roughly on par at nearly $34 billion.

But during the five years from 2013, China’s spending in overseas development finance program stood at $85.4 billion a year on average while the U.S. spending was $37 billion and Japan’s $25 billion, the report said.