Ideas to Action:

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Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 
A road construction project in Sri Lanka. Photo by Deshan Tennekoon/World Bank

In the Secretive World of Government-to-Government Lending, 100 Chinese Debt Contracts Offer a Trove of New Information

Is Chinese financing good for developing countries? Taking stock of China’s lending activities has long been hindered by the lack of publicly available data on dimensions like loan volumes and interest rates, let alone more esoteric features like loan collateral or default contingencies. A pathbreaking new study by researchers at AidData at William & Mary, the Kiel Institute for the World Economy, the Peterson Institute for International Economics, Georgetown Law School, and the Center for Global Development changes that.

Illustration of a surveillance camera singling out one person in a crowd.

A League of Digital Democracies: How Building Consensus on Digital Norms Would Boost the Biden Administration’s Effort to Support Democracy Abroad

President-elect Biden has stated his intention to rebuild values-based alliances and reassert the United States’ role in promoting democracy abroad. Limiting the spread of the digital authoritarianism model that China has pioneered at home and abroad will be key to this effort. To succeed, the US must rally like-minded liberal democracies around a set of principles for the digital age that promote shared prosperity and personal freedom. Failure to do so will allow countries like China and Russia to exert greater influence on the digital governance rules that other countries choose to follow.

A worker at an industrial factory. Adobe Stock.

Survey: China’s Small and Medium-sized Enterprises Rebounded After the COVID-19 Lockdown, But Economic Problems Linger

To understand the impact of the lockdown on China’s SMEs and the extent of their recovery, the Enterprise Survey for Innovation and Entrepreneurship in China project team conducted two rounds of telephone interviews in February and May 2020. The survey probed SMEs’ work resumption and production situation, the main difficulties they faced, their efforts to adapt, demands for appropriate assistance policies, and the reach of lockdown-related business assistance programs.

Map of Chinese lending projects around the world, concentrated in Europe, Asia, and Africa

The Problem Isn’t that Chinese Lending Is Too Big, It’s that the US and Europe’s Is Too Small

As the possibility of a new Cold War between the US and China gains traction in some foreign policy circles, the scale of Chinese development finance has taken center stage. A closer examination suggests the cost to China of this lending is distinctly underwhelming. It would be cheap for the US and Europe to match China’s lending numbers –and in the interest of global development if it was done right.

An image of a Chinese city

Fiscal Policy and Income Distribution in China

Since China introduced far-reaching economic reforms in 1978, it has experienced rapid economic growth and social development that has significantly improved the overall well-being of the Chinese population and lifted an enormous number of people out of poverty. But at the same time, income inequality in China has increased dramatically over the past three decades, and there is a significant divide between urban and rural areas as well as between regions.

A construction worker at an unfinished building in China. Curt Carnemark, World Bank photo.

With a Debt Crisis Looming, Researchers Who Estimated China’s “Hidden” Lending Respond to Their Critics

Last year, economists Sebastian Horn, Carmen Reinhart, and Christoph Trebesch put forward estimates of the Chinese government’s external (“overseas”) lending in a working paper. Their work was a landmark effort in a number of respects. Perhaps not surprisingly for a working paper, Horn et al. also attracted critics. In a new note for CGD, Horn et al. respond to this criticism.

A stock photo of a see-through piggy bank. Adobe Stock.

A Reckoning for China’s Opaque Overseas Lending

We are so accustomed to the Chinese government’s lack of transparency that the opaqueness of China’s overseas loans seems unremarkable at this point. But as we face what inevitably looks like a global debt crisis, one that is likely to hit low-income countries particularly hard, a clear accounting of the scale of the problem is critical. 

A worker working on wood floors in a factory in Zhejiang, China. Photo by ILO, via Flickr

COVID-19’s Impact on China’s Small and Medium-sized Businesses

Since the COVID-19 outbreak began in Nov. 2019 in Hubei Province, China, business activity in the world’s second-largest economy has ground to a halt. China’s small and medium enterprises (SMEs), which generate 90% of employment, constitute 80% of exports, and account for 70% of GDP, have been hit particularly hard.

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