Arbeitspapier
China as an international lender of last resort
This paper shows that China has launched a new global system for cross-border rescue lending to countries in debt distress. We build the first comprehensive dataset on China's overseas bailouts between 2000 and 2021 and provide new insights into China's growing role in the global financial system. A key finding is that the global swap line network put in place by the People's Bank of China is increasingly used as a financial rescue mechanism, with more than USD 170 billion in liquidity support extended to crisis countries, including repeated rollovers of swaps coming due. The swaps bolster gross reserves and are mostly drawn by distressed countries with low liquidity ratios. In addition, we show that Chinese state-owned banks and enterprises have given out an additional USD 70 billion in rescue loans for balance of payments support. Taken together, China's overseas bailouts correspond to more than 20 percent of total IMF lending over the past decade and bailout amounts are growing fast. However, China's rescue loans differ from those of established international lenders of last resort in that they (i) are opaque, (ii) carry relatively high interest rates, and (iii) are almost exclusively targeted to debtors of China's Belt and Road Initiative. These findings have implications for the international financial and monetary architecture, which is becoming more multipolar, less institutionalized, and less transparent.
- Sprache
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Englisch
- Erschienen in
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Series: Kiel Working Paper ; No. 2244
- Klassifikation
-
Wirtschaft
International Investment; Long-term Capital Movements
International Monetary Arrangements and Institutions
International Policy Coordination and Transmission
Economic Impacts of Globalization: Finance
International Financial Markets
National Debt; Debt Management; Sovereign Debt
Economic History: Financial Markets and Institutions: Asia including Middle East
- Thema
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China
financial crises
sovereign debt crises
bailouts
rescue loans
external debt
official lending
hidden debts
sovereign risk
Belt and Road initiative
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Horn, Sebastian
Parks, Bradley
Reinhart, Carmen M.
Trebesch, Christoph
- Ereignis
-
Veröffentlichung
- (wer)
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Kiel Institute for the World Economy (IfW Kiel)
- (wo)
-
Kiel
- (wann)
-
2023
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Horn, Sebastian
- Parks, Bradley
- Reinhart, Carmen M.
- Trebesch, Christoph
- Kiel Institute for the World Economy (IfW Kiel)
Entstanden
- 2023