China hands out at least twice as much development money as the US and other major powers, new evidence shows, with most of it coming in the form of risky high-interest loans from Chinese state banks.

The sheer amount of Chinese lending is startling. Not too long ago China received foreign aid, but now the tables have turned.

Over an 18-year period, China has granted or loaned money to 13,427 infrastructure projects worth $843bn across 165 countries, according to the AidData research lab at William & Mary, a university in the US state of Virginia.

Much of this money is linked to Chinese President Xi Jinping's ambitious Belt and Road strategy. Starting in 2013, it leverages China's expertise in infrastructure projects, and ample foreign currency, to build new global trading routes.

However, critics fear that the high-interest loans funding many Chinese projects are saddling unsuspecting populations in sky-high debt.

And that's news even to Chinese officials themselves. The AidData researchers - who have spent four years tracing all of China's global lending and spending - say that Chinese government ministries are regularly going to them for information on how Chinese money is being used overseas.

In September 2020, on the brink of bankruptcy, Laos sold a major asset to China, handing over part of its energy grid for $600m in order to seek debt relief from Chinese creditors. Prior to this, Laos had borrow $480m loan from a Chinese bank to fund it's railway project.

Many Chinese state developments loans also demand unusual forms of collateral. Increasingly, Chinese loans appear to require borrowers to promise hard cash earned from selling natural resources.

A deal with Venezuela, for example, demands the Venezuelan borrower deposit the foreign currency earned by selling oil directly into a bank account controlled by China. If a debt payment is missed, the Chinese lender can immediately withdraw the cash waiting in the account. "[That is] income for these very poor countries, dollars and euros, to lock those up in an offshore account that's controlled by a foreign power."

"It really seems like kind of a bread-and-butter strategy they use to signal to their borrower that 'We're the big boss around here'," Brad Parks explains. "Their message is: 'You're going to repay us before anyone else because we're the only ones asking for this prized possession'.

"Almost 40% of sub-Saharan African countries are in danger of slipping into a major debt crisis" according to the Overseas Development Institute, ahead of a major conference on debt being held in London this week.

And the relationship between African nations and China is often seen as a significant part of the problem.

Its critics say that major infrastructure projects carried out by Chinese companies in Africa are too expensive, and burden the host countries with enormous debts they can't hope to repay.

The Chinese government is adamant that its economic relationships with African countries are mutually beneficial and rejects suggestions that it is using debt to expand global influence.

Compared to institutions such as the IMF, World Bank and Paris Club (a group of 22 creditor nations not including China), loans from China are seen by some as much quicker, cheaper, and come with fewer strings attached.

Nigeria spent $402.74m in the 18 month period servicing bilateral loans, even as it borrowed $400m.
Nigeria owes the World Bank a total of $11.51bn as of march 2021, owes China $3.48bn as of the end of June 2021, owes AfDB’s $2.74bn, N17.632 trillion of the domestic debt.
Nigeria’s total public debt stock was N33.107 trillion or USD87.239 billion, as at March 31, 2021.

Nevertheless, 77 oil firms owe Nigeria $6.48b amid huge borrowing.

So what happens if they can't pay?