\n Developing nations are now repaying more to China than they receive in new financing, showing a growing strain on economies already battling debt distress and underinvestment in climate action, according to a new report by Boston University\u2019s Global Development Policy Centre.\n <\/p>\n
\n The report, Reviving Chinese Development Finance in the Global South, found that net debt transfers from China to developing countries turned negative in 2022 and 2023, as nations collectively repaid $3.9 billion more each year than they borrowed.\n <\/p>\n
\n China, the world\u2019s largest bilateral lender, has long been a major financier of infrastructure in the Global South, channelling over $472 billion through its two policy banks, the China Development Bank and the Export-Import Bank of China, between 2008 and 2024, Reuters<\/a> reported.\n <\/p>\n \n These funds supported more than 900 projects worth $316 billion in transport, energy, water systems, and digital infrastructure, significantly contributing to public assets, economic growth, and poverty reduction, the study noted.\n <\/p>\n \n The authors, Rebecca Ray, Kevin Gallagher, Zheng Zhai, Marina Zucker-Marques, and Yan Liang, warned that without a rebound in Chinese overseas lending, growth and climate investment in developing nations could stall.\n <\/p>\n \n The paper outlined five measures to reinvigorate development finance in ways that benefit both China and its partner countries: refinancing distressed loans, issuing RMB-denominated bonds, expanding green lending, encouraging cooperative foreign investment, and deepening South\u2013South trade.\n <\/p>\n \n Some signs of this revival are already emerging. In June, China announced plans to offer zero-tariff treatment to all 53 African countries with which it maintains diplomatic ties.\n <\/p>\n \n Beijing’s proposed zero-tariff initiative is seen as a strategic move to boost imports from Africa while offering a lifeline to Chinese state-owned firms struggling with declining demand at home.\n <\/p>\n Africa deepens yuan ties<\/p>\n \n Earlier this year, Afreximbank launched its first yuan-denominated panda bond, while in South Africa, the China-Africa Development Fund is preparing to bid for renewable energy transition projects.\n <\/p>\n \n In Kenya, Finance Minister John Mbadi announced this week that three major Chinese railway loans have been converted from U.S. dollars to yuan to cut interest costs, a move signalling a deeper financial alignment between China and its African partners.\n <\/p>\n