A report by the Lowy Institute warns that 75 of the world’s poorest countries are facing a “tidal wave” of debt repayments to China, with total debt repayments expected to reach record highs of $22 billion in 2025. The analysis says China has become more of a debt collector than banker for developing nations, putting pressure on local funding for essential services like healthcare and education.
The loans were largely issued under President Xi Jinping’s Belt and Road Initiative (BRI), which aimed to invest in infrastructure projects across Asia and beyond. However, the practice has raised concerns about Chinese influence and control, with some accusing Beijing of creating debt traps.
China denies deliberately creating debt traps, but recipient nations have pushed back, saying China was a more reliable partner when others refused. The report notes that the record-high debt could be used for “political leverage” amid cuts to foreign aid by the Trump administration.
The situation has put China in a bind, with diplomatic pressure to restructure unsustainable debt and domestic pressure to recall loans as the country faces its own economic downturn. The Lowy Institute says its estimates likely underestimate the full scale of China’s lending, which could be hidden at $385 billion.
Source: https://www.theguardian.com/world/2025/may/27/poorest-750-nations-face-tidal-wave-of-debt-repayments-to-china-in-2025-study-warns