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China Takes a Lot More Risks in Loans to African Countries Than Other International Creditors

Exterior of the China Exim Bank building in Beijing. Image via CGTN.

New research finds that China has a much higher risk tolerance in its overseas lending practices, particularly to African countries, compared to other major creditors from the U.S., Europe, and Japan. “There is a negative relationship between credit risk and Chinese development finance—a disproportionate share of Chinese loan commitments to African countries are made to governments with high credit risk levels,” concluded David Landry, a professor at Duke University and independent consultant Gailyn Portelance in a new paper published by the Center for Global Development.

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