According to a study released on Monday, China’s waiver of 23 interest-free loans to African countries last month amounted to only 1.1% of Chinese lending to the continent.
In August, China’s foreign ministry said that it had canceled 23 loans to 17 African nations that were due in 2021, but it did not provide any further details.
Researchers at Boston University calculated the waived loans’ total value using a database of Chinese government lending that researchers had developed. The waived loans ranged in maturity from 10 to 30 years and were worth up to $610 million in total.
Since cancelling debts from the 1980s and 1990s in 2000, China has waived some loans to African nations. However, analysts claim that under the Belt and Road Initiative (BRI), which was established in 2013, China typically takes a harsher position on restructuring lending to developing countries.
According to the Boston University database, which monitors loans issued since 2000, Chinese state-owned lenders pledged $53.8 billion in loans to Africa between 2000 and 2012. The debts cancelled last month were just a tiny part of this total.
In China’s lending policies, “(Interest-Free Loan) Provision and Cancellation are Important Diplomatic and Symbolic Tools,” according to the report by Jyhjong Hwang and Oyintarelado Moses.
The loans, they said, “more akin to foreign policy instruments than bottom line-oriented financial instruments.”
According to researchers and African government officials, interest-free loans from China to Africa, which have funded government structures, stadiums, and hospitals, are typically viewed as donations.