{"id":27976,"date":"2024-06-14T11:47:46","date_gmt":"2024-06-14T15:47:46","guid":{"rendered":"https:\/\/www.bu.edu\/gdp\/?p=27976"},"modified":"2025-02-03T14:55:29","modified_gmt":"2025-02-03T19:55:29","slug":"feeling-the-stones-chinese-development-finance-to-latin-america-and-the-caribbean-2023","status":"publish","type":"post","link":"https:\/\/www.bu.edu\/gdp\/2024\/06\/14\/feeling-the-stones-chinese-development-finance-to-latin-america-and-the-caribbean-2023\/","title":{"rendered":"Feeling the Stones: Chinese Development Finance to Latin America and the Caribbean, 2023"},"content":{"rendered":"<figure id=\"attachment27983\" aria-describedby=\"caption-attachment27983\" style=\"width: 710px\" class=\"wp-caption alignnone\"><a href=\"\/gdp\/files\/2024\/06\/ramon-bucard-0ruOaXdDb7g-unsplash-scaled.jpg\"><img loading=\"lazy\" src=\"\/gdp\/files\/2024\/06\/ramon-bucard-0ruOaXdDb7g-unsplash-636x477.jpg\" alt=\"\" width=\"700\" height=\"525\" class=\"wp-image-27983\" srcset=\"https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/ramon-bucard-0ruOaXdDb7g-unsplash-636x477.jpg 636w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/ramon-bucard-0ruOaXdDb7g-unsplash-1024x768.jpg 1024w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/ramon-bucard-0ruOaXdDb7g-unsplash-768x576.jpg 768w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/ramon-bucard-0ruOaXdDb7g-unsplash-1536x1152.jpg 1536w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/ramon-bucard-0ruOaXdDb7g-unsplash-2048x1536.jpg 2048w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><figcaption id=\"caption-attachment27983\" class=\"wp-caption-text\">Vila Velha, Esp\u00edrito Santo, Brazil. Photo by Ramon Bu\u00e7ard via Unsplash.<\/figcaption><\/figure>\n<p>The <a href=\"https:\/\/www.thedialogue.org\/map_list\/\" target=\"_blank\" rel=\"noopener noreferrer\">Chinese Loans to Latin America and the Caribbean (CLLAC) Database<\/a>, jointly managed by the Inter-American Dialogue and the Boston University Global Development Policy Center, recorded two new Chinese overseas finance commitments in 2023 worth a combined $1.3 billion.<\/p>\n<p>Both loans were made to Brazil\u2019s Banco Nacional de Desenvolvimento Econ\u00f4mico e Social (BNDES) by the China Development Bank (CDB) in separate $800 million and $500 million agreements for long-term and short-term investments, respectively, in infrastructure and green economy in Brazil.<\/p>\n<p>The CLLAC Database tracks public and publicly guaranteed loans from China\u2019s two development finance institutions (DFIs) \u2013 the CDB and the Export-Import Bank of China (Ex-Im Bank) to LAC governments and state-owned enterprises.<\/p>\n<p><a href=\"\/gdp\/files\/2024\/06\/GCI-CLLAC-Report-2024-FIN.pdf\" target=\"_blank\" rel=\"noopener noreferrer\"><strong><em>A new joint report<\/em><\/strong><\/a> discusses the trends and implications of the changing China-LAC financial relationship.<\/p>\n<h5><strong>\u00a0<\/strong><strong>Key findings:<\/strong><\/h5>\n<ul>\n<li>In 2023, the CLLAC Database recorded two loans to just one LAC country (Brazil) totaling $1.3 billion, representing a slight increase in lending from the $863 million issued by CDB and Ex-Im Bank to the region in 2022.<\/li>\n<li>Between 2019-2023, the LAC region received an average of just over $1.3 billion per year from CDB and Ex-Im Bank (see Figure 1), as compared to peak DFI lending in 2010, when CDB alone issued nearly $25 billion to the region.<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><strong>Figure 1: China Development Bank and Ex-Im Bank Finance to LAC, 2005-2023 (US$ Billions)<\/strong><\/p>\n<figure id=\"attachment27977\" aria-describedby=\"caption-attachment27977\" style=\"width: 646px\" class=\"wp-caption aligncenter\"><a href=\"\/gdp\/files\/2024\/06\/Figure-1.png\"><img loading=\"lazy\" src=\"\/gdp\/files\/2024\/06\/Figure-1-e1718300102514-636x343.png\" alt=\"\" width=\"636\" height=\"343\" class=\"wp-image-27977 size-medium\" srcset=\"https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-1-e1718300102514-636x343.png 636w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-1-e1718300102514-768x415.png 768w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-1-e1718300102514.png 924w\" sizes=\"(max-width: 636px) 100vw, 636px\" \/><\/a><figcaption id=\"caption-attachment27977\" class=\"wp-caption-text\">Source: Chinese Loans to Latin America and the Caribbean Database, Inter-American Dialogue and Boston University Global Development Policy Center, 2024.<\/figcaption><\/figure>\n<ul>\n<li>A decade ago, Chinese finance to LAC surpassed that of the World Bank and the Inter-American Development Bank (IDB). Now, lending from the World Bank and IDB has surpassed that of Chinese DFIs in the region, as seen in Figure 2.<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><strong>Figure 2: Development Finance in LAC, 2005-2023 (US$ Billions)<\/strong><\/p>\n<figure id=\"attachment27978\" aria-describedby=\"caption-attachment27978\" style=\"width: 646px\" class=\"wp-caption aligncenter\"><a href=\"\/gdp\/files\/2024\/06\/Screenshot-2024-06-12-at-3.36.39-PM.png\"><img loading=\"lazy\" src=\"\/gdp\/files\/2024\/06\/Screenshot-2024-06-12-at-3.36.39-PM-636x363.png\" alt=\"\" width=\"636\" height=\"363\" class=\"size-medium wp-image-27978\" srcset=\"https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Screenshot-2024-06-12-at-3.36.39-PM-636x363.png 636w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Screenshot-2024-06-12-at-3.36.39-PM-1024x584.png 1024w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Screenshot-2024-06-12-at-3.36.39-PM-768x438.png 768w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Screenshot-2024-06-12-at-3.36.39-PM.png 1104w\" sizes=\"(max-width: 636px) 100vw, 636px\" \/><\/a><figcaption id=\"caption-attachment27978\" class=\"wp-caption-text\">Source: Chinese Loans to Latin America and the Caribbean Database, Inter-American Dialogue and Boston University Global Development Policy Center, 2024.<\/figcaption><\/figure>\n<ul>\n<li>Despite the drop in DFI finance in the region, Brazil continues to feature as an occasional recipient of recent Chinese DFI loans, as seen in Figure 3. Between 2019-2022, Brazil received over $1.5 billion in financial support from China\u2019s DFIs, including trade financing and a term loan for BNDES.<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><strong>Figure 3: China Development Bank and Ex-Im Bank Finance to Brazil, 2005-2023 (US$ Billions)<\/strong><\/p>\n<figure id=\"attachment27979\" aria-describedby=\"caption-attachment27979\" style=\"width: 646px\" class=\"wp-caption aligncenter\"><a href=\"\/gdp\/files\/2024\/06\/Figure-3.png\"><img loading=\"lazy\" src=\"\/gdp\/files\/2024\/06\/Figure-3-636x410.png\" alt=\"\" width=\"636\" height=\"410\" class=\"wp-image-27979 size-medium\" srcset=\"https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-3-636x410.png 636w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-3-1024x659.png 1024w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-3-768x495.png 768w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-3.png 1104w\" sizes=\"(max-width: 636px) 100vw, 636px\" \/><\/a><figcaption id=\"caption-attachment27979\" class=\"wp-caption-text\">Source: Chinese Loans to Latin America and the Caribbean Database, Inter-American Dialogue and Boston University Global Development Policy Center, 2024.<\/figcaption><\/figure>\n<ul>\n<li>In general, Chinese DFI finance to Brazil has moved from a focus on energy loans to other forms of finance over time.<\/li>\n<li>Brazil\u2019s Petrobras, a recipient of sizeable CDB loans\u2014has nevertheless signaled an interest in doing more with Chinese DFIs in the coming years.\n<ul>\n<li>The company signed a 2023 memorandum of understanding (MOU) to expand cooperation with CDB on low-carbon initiatives and green finance, financing Petrobras\u2019 domestic supply chain, and increasing commercial and financial exchanges between Petrobras and Chinese companies.<\/li>\n<\/ul>\n<\/li>\n<li>Even as sovereign loans from China\u2019s DFIs dwindle, CDB and Ex-Im Bank are known to provide direct finance to Chinese and Latin American companies, such as a $53 million CDB loan to Argentina Telecom in 2022.<\/li>\n<li>Chinese companies, now well established in much of the region and no longer dependent on DFI loans to generate opportunities for their involvement in infrastructure projects, are also accounting for more of China\u2019s lending to LAC and other regions.<\/li>\n<li>China\u2019s commercial banks have increasingly stepped into the fold, too, mainly through syndicated loans to Chinese or LAC companies.<\/li>\n<li>While the era of large-scale Chinese development finance in LAC may have passed, debt remains a concern for some countries. Figure 5 shows the most recently reported debt levels and debt service projections to China for the region. Only one country\u2014<strong>Suriname<\/strong>\u2014reported debt levels to Chinese creditors of over 5 percent of GDP, or projected debt service payments amounting to over 2 percent of projected exports over the next five years.<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><strong>Figure 5: LAC Public and Publicly Guaranteed (PPG) Debt and Debt Service to Chinese Creditors<\/strong><\/p>\n<figure id=\"attachment27980\" aria-describedby=\"caption-attachment27980\" style=\"width: 646px\" class=\"wp-caption aligncenter\"><a href=\"\/gdp\/files\/2024\/06\/Figure-5.png\"><img loading=\"lazy\" src=\"\/gdp\/files\/2024\/06\/Figure-5-636x475.png\" alt=\"\" width=\"636\" height=\"475\" class=\"size-medium wp-image-27980\" srcset=\"https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-5-636x475.png 636w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-5-768x574.png 768w, https:\/\/www.bu.edu\/gdp\/files\/2024\/06\/Figure-5.png 855w\" sizes=\"(max-width: 636px) 100vw, 636px\" \/><\/a><figcaption id=\"caption-attachment27980\" class=\"wp-caption-text\">Source: Rebecca Ray and B. Alexander Simmons. 2024. \u201cNow or Never: Mobilizing Capital for Climate and Conservation in a Debt-Constrained World.\u201d Boston University Global Development Policy Center.<\/figcaption><\/figure>\n<p>The next few years will be marked by debt negotiations between China and its debtors in the region, but also by continued recalibration, as China adjusts its domestic economic policy and as the Belt and Road Initiative and related finance and investment, follow suit.<\/p>\n<p>As in previous years, there is little to indicate a resurrection of the multibillion-dollar, oil-backed lending that once characterized the bulk of China\u2019s financial engagement with the region. However, if 2023 is any indication, CDB and Ex-Im Bank will remain committed to issuing smaller loans that are closely linked to Chinese and host country development objectives, whether they concern transport infrastructure development, or generating investment and trade in priority emerging industries.<\/p>\n<p><em>The Chinese Loans to Latin America and the Caribbean (CLLAC) Database has been archived in February 2025.<\/em><\/p>\n<a href=\"https:\/\/www.thedialogue.org\/map_list\/\" class=\"button\">Explore the Data<\/a>\n<a href=\"\/gdp\/files\/2024\/06\/GCI-CLLAC-Report-2024-FIN.pdf\" class=\"button\">Read the Report<\/a>\n<a href=\"https:\/\/www.bu.edu\/gdp-cn\/2024\/06\/17\/%e7%a0%94%e7%a9%b6%e9%80%9f%e9%80%92%ef%bd%9c%e6%91%b8%e7%9d%80%e7%9f%b3%e5%a4%b4%e8%bf%87%e6%b2%b3%ef%bc%9a2023%e5%b9%b4%e4%b8%ad%e5%9b%bd%e5%9c%a8%e6%8b%89%e7%be%8e%e7%9a%84%e5%bc%80%e5%8f%91\/\" class=\"button\">\u9605\u8bfb\u62a5\u544a\u6458\u8981<\/a>\n","protected":false},"excerpt":{"rendered":"<p>The Chinese Loans to Latin America and the Caribbean (CLLAC) Database, jointly managed by the Inter-American Dialogue and the Boston University Global Development Policy Center, recorded two new Chinese overseas finance commitments in 2023 worth a combined $1.3 billion. Both loans were made to Brazil\u2019s Banco Nacional de Desenvolvimento Econ\u00f4mico e Social (BNDES) by the [&hellip;]<\/p>\n","protected":false},"author":21995,"featured_media":27983,"comment_status":"closed","ping_status":"open","sticky":true,"template":"","format":"standard","meta":[],"categories":[1137,73,156,72,1146,76,104],"tags":[4065,1592,2964,598,3613,4348,437,474,1201,700,689,3571],"_links":{"self":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/27976"}],"collection":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/users\/21995"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/comments?post=27976"}],"version-history":[{"count":14,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/27976\/revisions"}],"predecessor-version":[{"id":29971,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/27976\/revisions\/29971"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media\/27983"}],"wp:attachment":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media?parent=27976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/categories?post=27976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/tags?post=27976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}