## The HIPC Initiative and China’s Emergence as a Lender: post hoc or propter hoc?

_IMF Working Papers, January 31, 2025_

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## Bibliographic details
- Authors: Tito Cordella, Maia Cufre, Andrea F Presbitero
- Published: January 31, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229001366.001

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### Summary and principal findings
- Twenty years after the Heavily Indebted Poor Countries (HIPC) debt relief initiative, debt levels in low-income countries are rising again, renewing sustainability concerns.
- Prevailing narrative: China and other emerging lenders exploited the HIPC initiative to expand lending.
- Using a synthetic control method to generate a counterfactual, the authors find:
  - China and other emerging lenders reduced net lending after debt relief.
  - Only multilateral creditors increased net lending after debt relief.
  - No support for the claim that debt relief encouraged lending to political allies.
- Overall conclusion: Debt relief seems to have had limited influence on subsequent lending patterns.

### Methodology
- Analytical approach: Synthetic control method used to generate a counterfactual to assess lending behavior following HIPC debt relief.

### Subjects and keywords
- Subject: Asset and liability management, Debt burden, Debt relief, Debt service, External debt
- Keywords: Africa, China, China's emergence, Debt burden, debt forgiveness, Debt relief, debt relief initiative, Debt service, Geoeconomics, Global, HIPC debt relief, International lending, MDRI debt relief, Sovereign debt

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_Source: https://www.imf.org/en/publications/wp/issues/2025/01/31/the-hipc-initiative-and-chinas-emergence-as-a-lender-post-hoc-or-propter-hoc-561462_