Between 2008 and 2021, China has granted rescue loans worth 240 billion dollars to 22 developing countries at risk of insolvency, reports “France Presse”.

This is clear from a study that indicates that this trend has accelerated in recent years.

Almost all of the funds have gone to Belt and Road countries such as Sri Lanka, Pakistan and Turkey – mostly low- and middle-income countries that have received Chinese loans for infrastructure development.

The study was produced by the US-based research laboratory AidData, the World Bank, the Harvard Kennedy School and the Kiel Institute for World Economics. It shows that bailout lending accelerated between 2016 and 2021, with Beijing disbursing 80% of its bailout loans in that period.

Around the world, Belt and Road countries are under pressure as soaring inflation and interest rates, compounded by the ongoing impact of the COVID-19 pandemic, have hurt their ability to service their debts.

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It is noted that bailouts allow countries to extend the term of their loans and remain solvent.

According to China, more than 150 countries have joined the Belt and Road Initiative, a trillion-dollar global infrastructure project unveiled by President Xi Jinping a decade ago. Beijing says the initiative aims to deepen friendly trade relations with other countries, especially in the developing world.

But critics have long accused China of driving lower-income countries into debt traps by offering them huge and unaffordable loans.

The study said China has developed a “Belt and Road” bailout system that helps recipient countries avoid bankruptcy and continue to service their project debts, at least in the short term.

It added that compared to the International Monetary Fund and the massive liquidity support provided by the US Federal Reserve, China’s bailouts remain small but grow rapidly.

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Beijing has targeted a limited set of potential recipients, with almost all of China’s bailout loans going to low- and middle-income Belt and Road countries with significant outstanding debts to Chinese banks, the report found.

It warns that Chinese loans are more opaque than other international lenders of last resort and are often granted at an average interest rate of 5%, compared to the typical 2% for an IMF loan. Many of these agreements are so-called “rollovers”, where the same short-term loans are granted repeatedly to refinance debts with an upcoming maturity.

This month, China agreed to restructure its loans to Sri Lanka, clearing the way for the island nation’s bailout from the IMF, which lists Beijing as its largest bilateral creditor.