The Countries Most in Debt to China.

• Author: Buchholz, Katharina

Byline: Katharina Buchholz

According to research recently published by the Kiel Institute for the World Economy, there are seven countries in the world whose external loan debt to China surpasses 25 percent of their GDP. Three (Djibouti, Niger and The Republic of the Congo) are located in Africa, while four (Kyrgyztan, Laos, Cambodia and the Maldives) are in Asia.

Yet, the world map of debt to China amassed through direct loans (excluding debt holdings and short-term trade debt) shows that a majority of countries heavily in debt to China are in Africa, but that Central Asia and Latin America follow close behind.

While China's overseas lending is coordinated by the country's centralized government, it is often poorly documented, which the researchers of the paper were trying to change. They found that debt by direct loans started to grow immensely only around 2010 and that loans by China often come at higher rates and with shorter grace...