Gallagher Publishes Op-Ed on Dip in Chinese Development Finance
Kevin Gallagher, Professor of Global Development Policy and Director of the Global Development Policy Center at the Frederick S. Pardee School of Global Studies at Boston University, co-wrote a recent Op-Ed examining the dip in Chinese development finance in 2017.
Gallagher’s Op-Ed, which he co-wrote with Xinyue Ma, was published in Dialogo Chino on March 12, 2018. The Op-Ed is entitled “Chinese Development Finance Falls in 2017.”
From the text of the article:
China’s ambitious Belt and Road Initiative (BRI) kicked-off with a major summit last year, but despite the hype this did not lead to a major increase in Chinese development finance in 2017.
Nevertheless, China’s development banks appear to be pivoting toward BRI countries over others, and also appear to be focusing more on power generation rather than upstream energy activities.
Despite some Western comments to the contrary, finance for development is sorely needed across the world, especially in infrastructure and energy. However, the mix of countries and sectors that Chinese development banks appear to be focused on bring risks along with the reward.
China’s two global policy banks, the Chinese Development Bank and the Export-Import Bank of China, provided approximately US$25.6 billion in financing to foreign governments in the energy sector in 2017, reaching US$225.8 billion since 2000. The 2017 figure is about half of the 2016 total of US$47.3 billion, but close to the average amount of foreign lending in energy since China announced the BRI in 2013.
These estimates are from the newly released China Global Energy Database that we publish annually at Boston University’s Global Development Policy Center, where the data is freely accessible and can be explored.
Gallagher was also quoted in a March 12, 2018 article in Bloomberg entitled “China Seen Slowing Spending on Belt and Road Energy Projects.“
From the text of the article:
“In late 2016 and early 2017 China suffered a rush of capital outflows due to a mix of premature capital account liberalization and external conditions,” Kevin Gallagher, professor of Global Development Policy at Boston University, said by email. “This led to some fairly tight restriction on capital flows that slowed things down a bit across the board.”
The Financial Times also quoted Gallagher in a March 11, 2018 article entitled “Africa Eats Up Lion’s Share of Chinese Lending.“
From the text of the article:
The door to Chinese lenders has been left open by a comparative lack of action from the western-backed multilateral lenders. “Traditional multilateral development banks have not been forthcoming in big energy and China has been more than willing to fill the void,” said Kevin Gallagher, professor of global development policy at Boston University.
In addition, Prof Gallagher said, Africa’s demographic explosion, which is likely to lead to an additional 1.3bn people on the continent by 2050, underscored the demand for power generation and transmission for decades to come.
Gallagher served on the U.S. Department of State’s Investment Subcommittee of the Advisory Committee on International Economic Policy and the International Investment Division of the United Nations Conference on Trade and Development. He has served as a visiting or adjunct professor at the Paul Nitze School for Advanced International Studies at Johns Hopkins University, the Fletcher School of Law and Diplomacy, Tufts University; El Colegio de Mexico in Mexico; Tsinghua University in China; and the Center for State and Society in Argentina. You can follow him on Twitter @KevinPGallagher.