In a bid to boost its economic growth, China has been lending to countries all over the world. This Asian economic powerhouse has been one of the fastest-growing economies over the last two decades. China has since become the largest creditor to low and middle-income countries (LMICs), with $180 billion in loans in 2022.
A large portion of this debt went to the countries’ economic development and large infrastructure projects. By providing funding to LMICs, China, in return, gains access to resources that it needs to sustain its economy. This lending strategy also helps foster China’s geopolitical ties with countries in key regions.
World Bank website shows the following countries as having the most debt to China, in billion USD.
14. Belarus $3.9B
Belarus occupies 14th place on this list with approximately $3.9 billion in debt. China is one of the top international lenders to the landlocked Eastern European country. Belarus manages its debt by increasing foreign direct investment (FDI from China).
13. Côte d’Ivoire $3.9B
Côte d’Ivoire, or Ivory Coast, is one of several African countries that owe China the most. This West African country ranks 13th on this list and owes China some $3.9 billion. Côte d’Ivoire is popular for its beach resorts and rainforests.
12. Cambodia $4.0B
Cambodia owes China $4.0 billion, ranking it 12th on this list. This amount accounts for nearly 50% of the country’s total external debt. Cambodia is part of China’s Belt and Road Initiative (BRI) project, which aims to improve connectivity and cooperation among various countries.
11. Ecuador $4.1B
In 2022, Ecuador’s government restructured its debt with China, earning the South American country billions of dollars in relief until 2025. However, the country still owes a hefty $4.1 billion in loans, earning it the 11th spot on this list. China has become Ecuador’s primary financial partner over the last decade.
10. Nigeria $4.3B
Nigeria’s huge $4.3 debt to China accounts for only 4% of its total public debt. Still, it ranks the country as the 10th with the most debt to China. Nigeria’s government website dispels fears of its inability to service its massive debt to China.
9. Egypt $5.2B
Egypt takes 9th place on this list with a $5.2 billion debt. Sitting in a strategic geographical location, this country links the Middle East to North Africa. Egypt and China entered a debt-swapping deal for developmental projects.
8. Laos $5.3
China is Laos’s biggest creditor, providing it with $5.3 billion in funding for large infrastructure projects. This debt accounts for nearly half of the country’s total external debt, making Laos the eighth country with the most debt to China.
7. Zambia $6.1B
With $6.1 billion in debt, Zambia takes the seventh spot on this list. One of several African countries with a massive debt to China, it defaulted more than three years ago. Zambia has been working with China to develop a debt restructuring plan.
6. Bangladesh $6.1B
Bangladesh takes the sixth spot on this list with $6.1 billion in debt. The country is also part of China’s BRI project. Even with this large debt to China, it only accounts for about 7% of Bangladesh’s total external debt.
5. Kenya $6.7B
Kenya enters the top five on this list, owing China $6.7 billion. Despite the substantial amount, Kenya’s total external debt is from multilateral borrowing, with the World Bank as its largest creditor. The IMF-World Bank classifies the country as being at high risk of debt distress.
4. Ethiopia $6.8B
Ethiopia’s $6.8 billion debt to China puts it at number four on this list. Most of the country’s $7.7 debt to foreign governments belongs to China. Ethiopia was granted a suspension in payments to China in 2023, which ends in July 2024.
3. Sri Lanka $8.9B
China is also the largest creditor to Sri Lanka, extending some $8.9 billion in loans to the island country. With a strategic maritime location, political pundits suggest that China may be aiming to take over its ports. Chinese investments continue to pour into Sri Lanka amid debt restructuring talks.
2. Angola $21.0B
Angola has the most debt to China among African countries, with $21 billion, placing this oil-producing country at number 2 on this list. S&P estimates that 80% of debt to China was in oil-backed loans.
1. Pakistan $26.6B
Pakistan holds the distinction as the country most indebted to China, with $26.6 billion in debt. Most of the debt was accrued to fund infrastructure and energy projects. Some experts point out, however, that the loans come with commercial interest rates, making repayment incredibly costly for Pakistan.
A 2023 study by AidData says that 80% of Chinese loans are to LMICs in financial distress. The study lends fuel to discussions suggesting that China engages in a “debt trap diplomacy.” Experts say Countries that can’t pay have no choice but to make political and strategic concessions to China.
