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Between 2000 and 2019, China advanced more than US$153 billion, according to data compiled by CARI and released on Tuesday.
But after a decade of rapid growth, Chinese annual lending peaked at US$28 billion in 2016, driven by a major loan to Angola. Analysts said that if that significant US$19 billion refinancing loan to Angola was removed from the data “we see that Chinese lending in Africa peaked in 2013, the year the Belt and Road Initiative was launched”.
“The decline since 2013 reflects China’s current concerns about debt sustainability as well as structural transformation and planned shifts in the composition of the Chinese actors involved in outward expansion,” CARI research manager Kevin Acker and founder and director Deborah Brautigam said in the report “20 Years of Data on China’s Africa Lending”.
“Concerns about debt sustainability are reflected in finding that in 2019 Chinese lenders were concentrated in less risky countries … that had not previously asked Chinese banks for debt relief.”
China Exim Bank, which for decades has advanced most of the subsidised concessional foreign aid and preferential export buyers’ credits, has also slowed its Africa lending.
But the continent was now receiving more commercial loans from China Development Bank and other banks. Brautigam said China Exim Bank was over-optimistic about Africa’s potential to keep growing and use that growth to repay Chinese export credits.
“They realised this in 2014-2015 when commodity prices crashed, but by then they were already deeply exposed in a number of countries, like Cameroon, Republic of Congo, Angola and Ethiopia,” Brautigam said.
She said as China continued to position Shanghai as a global financial centre, “Chinese commercial banks will continue to grow as a share of China’s global lending, even if that lending faces a sustained trough due to the pandemic”.
