In 2025, China has emerged as the world’s leading debt collector, particularly among developing nations, marking a significant shift in global financial dynamics. This transformation is largely the result of the repayment obligations tied to China’s ambitious Belt and Road Initiative (BRI), launched in 2013, which funneled billions of dollars in loans to infrastructure projects across Asia, Africa, and Latin America. According to a comprehensive report by Australia’s Lowy Institute, developing countries are facing a “tidal wave” of debt repayments to China, with the poorest 75 nations alone expected to pay a record $22 billion this year. This surge in repayments threatens critical public spending on health, education, and climate initiatives in these vulnerable economies (Lowy Institute, 2025).
China’s role has shifted from being a net lender to a net debt collector as grace periods on many BRI loans have expired. The Lowy Institute’s analysis of World Bank data reveals that in 54 developing countries, debt service payments to China now exceed those owed to the Paris Club, a group of major Western bilateral lenders. This rapid change is attributed to the structure and timing of Chinese loans, which peaked in the mid-2010s and are now entering their repayment phase, causing a surge in debt servicing costs (Reuters, 2025).
The financial pressure from these repayments is substantial. Many debtor nations are forced to divert funds away from essential services to meet their obligations, undermining efforts to improve healthcare, education, and infrastructure. Riley Duke, the report’s author, warns that China will act more as a debt collector than a banker for the remainder of the decade, a dynamic that could exacerbate economic instability in already fragile states (Al Jazeera, 2025).
While new Chinese lending has declined significantly since the COVID-19 pandemic, China continues to extend loans in strategic areas. For example, countries such as Honduras and the Solomon Islands received sizable loans after shifting diplomatic recognition from Taiwan to China, and resource-rich nations like Indonesia and Brazil have signed new agreements to secure critical minerals. These targeted loans underscore China’s geopolitical strategy alongside its financial interests (Brussels Times, 2025).
Critics of China’s lending practices have long warned of “debt-trap diplomacy,” where unsustainable debt burdens could translate into political leverage. However, experts like Deborah Brautigam of Johns Hopkins University suggest China’s approach is evolving, with increased attention to debt sustainability and restructuring efforts. China is reportedly learning from past challenges and is under domestic and international pressure to manage its outstanding debts more prudently (WYPR, 2025).
In conclusion, China’s position as the top debt collector in 2025 reflects the maturation of its global lending footprint. The repayment surge from BRI loans is reshaping financial flows and economic policies in developing countries, with significant implications for global development and geopolitics. As China transitions from lender to collector, the international community faces new challenges in balancing infrastructure financing, debt sustainability, and geopolitical influence.
I like the efforts you have put in this, regards for all the great content.