In the 1990s, a middle-income country in need of an emergency “firefighting” loan as a last resort before IMF, United States. Now this role has taken over China. The last major loan granted USA in a developing country was in 2002 when they loaned Uruguay $1.5 billion.

China may still be a long way from surpassing the IMF, the “world’s largest lender,” which issued loans totaling $68.6 billion in 2021 – compared to China’s $40.5 billion – but impressive is the fact that China provided 14 billion in 2014 and nothing in 2010. China has lent its largest sums to geopolitically important countries such as Argentina, Turkey and Sri Lanka, but has not abandoned its clients to poor countries such as Laos, Nigeria and Suriname.

The position currently occupied by China in the transnational loans very characteristically reflects the constantly changing status in global economic superpower. An additional factor that has brought him to this position is the Belt and Road Initiative, which is now ten years old. Based on this plan, which was personally supported by the President XiChina is trying to develop diplomatic and economic ties with third countries, contributing to the construction of infrastructure on their territories. As part of this plan, China has invested more than $900 billion in 151 middle- and low-income countries, mainly in the construction of bridges, roads and hydroelectric power plants.

Under the Belt and Road Initiative, Beijing has invested more than $900 billion in infrastructure in 151 countries with companies, materials and workers from China.

The US has blamed the tactic, saying that China is leading third countries into a “debt trap” and that this infrastructure is being designed and built by Chinese companies using Chinese materials and often Chinese workers. China responds to these accusations by saying that it is building the necessary infrastructure in countries that are in dire need of what the West promised but did not deliver. But the fact remains that the country creates bonds of dependence with the countries it helps.

The lending rate is about 5% – the same as the rate at which the US used to lend – compared to 2% for IMF loans.

An important detail is the following: 90% of loans issued by the country in 2021 were issued in yuan, the Chinese currency. Thus, China is trying to compete with the dollar and displace it as the main international currency. When a country borrows RMB from China, using the so-called “swap method”, it keeps the borrowed RMB in its central bank. This means that in some countries, such as Mongolia, now more of the national capital is in Chinese currency than in dollars. The move brings women borrowers closer to China as the yuan makes it harder to buy anything other than Chinese goods and services. At their last meeting a few days ago, Xi and Putin agreed to link their trade and economic relations more to the Chinese currency.

To those who accuse China of creating dependency relations with poor countries, leading them to even worse economic conditions, Chinese Foreign Minister Qin Gang replies that his country has allowed many poor countries to defer their debt payments. “China has suspended more debt service payments than any other member of the group,” he said March 2 at a meeting of Chinese foreign ministers. G20.