China is overhauling the way it lends to developing nations, a strategy that may help their largest official creditor maintain a narrowing lead over the U.S. and its Group of Seven (G7) allies.
Beijing has begun moving away from the big bilateral deals it was eager to strike a decade ago — when it first launched its flagship Belt and Road initiative (BRI) that mainly lends to infrastructure projects — in favor of collaborative lending that reduces its exposure to financial risk, according to a new report published by AidData at William and Mary, a public university in Virginia.
The result is a moderate pullback in spending, though China still beats G7 countries. The Asian nation in 2021 provided aid and loans worth $79 billion to low- and middle-income nations, more than the $61 billion provided by the U.S., according to the latest available data from AidData. The World Bank that year made commitments worth around $53 billion.