How China lends: a rare look into 100 debt contracts with foreign governments.

This article presents the first systematic analysis of 100 sovereign debt contracts between Chinese state-owned lenders—including the Export–Import Bank of China (China Eximbank) and China Development Bank (CDB)—and government borrowers in 24 developing countries across Africa, Asia, Eastern Europe, Latin America, and Oceania. The study finds that Chinese contracts feature distinctive legal terms compared to a benchmark set of 142 contracts from other bilateral, multilateral, and commercial creditors, notably including broad confidentiality clauses that restrict borrowers from disclosing contract terms or even the existence of debt, "No Paris Club" clauses that exclude Chinese debt from coordinated restructuring efforts, and extensive cross-default and cancellation provisions that can be triggered by policy changes or actions adverse to Chinese interests. These contract features grant Chinese lenders enhanced seniority and discretion, potentially limiting debtor countries' policy space and complicating debt renegotiations. The article also discusses why developing countries borrow from China despite these creditor-friendly terms, highlighting factors such as relatively concessional interest rates compared to market financing, rapid project implementation, bundled financing and construction services, and fewer policy conditions than other official creditors. The authors conclude by emphasizing the need for greater transparency, improved debt management capacity, and enhanced inter-creditor coordination to address sovereign debt challenges in developing countries.