Tidal wave of debt: Poorest nations struggle as loan repayments to China peak in 2025
Beijing has poured billions into infrastructure projects across Africa, Asia and the Pacific region

The world's most impoverished nations are bracing for financial crisis, with debt repayments to China projected to hit record levels in 2025, according to a new report released on Tuesday, 27 May, by Australia-based Lowy Institute.
The report highlights the shifting role China has been playing on the global economic stage. Once a major source of development finance through its ambitious Belt and Road Initiative (BRI), China is increasingly seen as a debt collector rather than a generous lender.
During the 2010s, Beijing poured billions into infrastructure projects —ranging from highways and railway lines to ports — across Africa, Asia and the Pacific region. However, new Chinese loans are now waning, even as repayment obligations surge.
“Developing countries are grappling with a tidal wave of debt repayments and interest costs to China,” said Riley Duke, a researcher at the Lowy Institute. “Now, and for the rest of this decade, China will be more debt collector than banker to the developing world.”
Using World Bank data, the Institute assessed the debt burden faced by the 75 poorest countries. It found that in 2025, these nations are expected to repay China a combined total of US$ 22 billion — an all-time high.
This marks a sharp reversal in China’s global financial position, transforming from a net lender to a net recipient of repayments.
“This transition signals a significant change in China’s role in global development finance,” Duke said. “It’s no longer primarily extending new credit — it’s collecting on old ones.”
The report warns that these spiralling repayments are putting critical social services at risk, with many governments forced to scale back spending on healthcare, education and climate resilience initiatives in order to meet their debt obligations.
China is not the only creditor placing pressure on struggling economies, however.
The report notes that repayments to private international lenders are also surging, exacerbating financial strain across the Global South.
Furthermore, the study raises concerns on whether China may seek to convert economic dependence into geopolitical leverage, particularly in light of reduced foreign aid spending by countries such as the United States.
Despite the overall downturn in Chinese lending, there are notable exceptions as well. The report identifies two categories of countries still receiving substantial Chinese finance. The first includes nations like Honduras and the Solomon Islands, which have recently shifted diplomatic recognition from Taiwan to Beijing.
The second is comprised of resource-rich countries such as Indonesia and Brazil, where China has inked new loan deals to secure access to critical minerals, including those used in battery production.
As the debt burden intensifies, the report underscores the urgent need for international cooperation to support vulnerable economies and ensure that development gains are not reversed by the weight of mounting repayment schedules.
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