基尔世界经济研究所-中国作为国际最后贷款人

ChinaasanInternationalLenderofLastResort

KIEL

WORKING

PAPER

No.2244March2023

SebastianHorn,BradleyC.Parks,CarmenM.Reinhart,ChristophTrebesch

KielInstitutefortheWorldEconomy

ISSN1862–1155

KIELWORKINGPAPERNO.2244|MARCH2023

ABSTRACT

CHINAASANINTERNATIONALLENDEROF

LASTRESORT

SebastianHorn,BradleyC.Parks,CarmenM.Reinhart,ChristophTrebesch*

FirstDraft:March2023

ThispapershowsthatChinahaslaunchedanewglobalsystemforcross-borderrescuelendingtocountriesindebtdistress.WebuildthefirstcomprehensivedatasetonChina’soverseasbailoutsbetween2000and2021andprovidenewinsightsintoChina’sgrowingroleintheglobalfinancialsystem.AkeyfindingisthattheglobalswaplinenetworkputinplacebythePeople’sBankofChinaisincreasinglyusedasafinancialrescuemechanism,withmorethanUSD170billioninliquiditysupportextendedtocrisiscountries,includingrepeatedrolloversofswapscomingdue.Theswapsbolstergrossreservesandaremostlydrawnbydistressedcountrieswithlowliquidityratios.Inaddition,weshowthatChinesestate-ownedbanksandenterpriseshavegivenoutanadditionalUSD70billioninrescueloansforbalanceofpaymentssupport.Takentogether,China’soverseasbailoutscorrespondtomorethan20percentoftotalIMFlendingoverthepastdecadeandbailoutamountsaregrowingfast.However,China’srescueloansdifferfromthoseofestablishedinternationallendersoflastresortinthatthey(i)areopaque,(ii)carryrelativelyhighinterestrates,and(iii)arealmostexclusivelytargetedtodebtorsofChina'sBeltandRoadInitiative.Thesefindingshaveimplicationsfortheinternationalfinancialandmonetaryarchitecture,whichisbecomingmoremultipolar,lessinstitutionalized,andlesstransparent.

Keywords:China,financialcrises,sovereigndebtcrises,bailouts,rescueloans,externaldebt,officiallending,hiddendebts,sovereignrisk,BeltandRoadinitiative

JELclassification:F21,F33,F42,F65,G15,H63,N25

SebastianHorn

WorldBank

1818HStreet,N.W.

WashingtonD.C.,USA

Email:

shorn1@

CarmenM.Reinhart

HavardKennedySchool

79JohnF.KennedyStreet

Cambridge,MA,USA

Email:carmen_reinhart@

www.hks.

BradleyC.Parks

AidData,William&Mary

Williamsburg,VA,USA

Email:bparks@

www.

ChristophTrebesch

KielInstitutefortheWorldEconomy

Kiellinie66

D-24105Kiel,Germany

Email:christoph.trebesch@ifw-kiel.de

www.ifw-kiel.de

Theresponsibilityforthecontentsofthispublicationrestswiththeauthor,nottheInstitute.Sinceworkingpapersareofapreliminarynature,itmaybeusefultocontacttheauthorofaparticularissueaboutresultsorcaveatsbeforereferringto,orquoting,apaper.Anycommentsshouldbesentdirectlytotheauthor.

*WethankAartKraay,RicardoReis,ArielBenYishay,BedriZymeriandconferenceparticipantsattheAEAAnnualMeetingsforhelpfulcommentsaswellasMaiaDebsforexcellentresearchassistance.TheviewsexpressedhereinarethoseoftheauthorsanddonotnecessarilyreflecttheviewsoftheWorldBankGroup.

helpfulcommentsandsuggestions.Anyremainingerrorsareourown.

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1.Introduction

Followingamorethandecade-longboominoverseaslendingandinvestment,China’sBeltandRoadInitiative(BRI)hascomeunderpressure,asmanyrecipient(debtor)countriesinthedevelopingworldexperiencefinancialdistress.1IthasalreadybeendocumentedthatChinesestatecreditorshaverespondedtothiscrisisbyreducingnewoverseaslendingflowstotheGlobalSouthandbynegotiatingdozensofsovereigndebtrestructurings(Hornetal.2022b,2023).WhatislesswellunderstoodandofmorerecentvintageisthelargeandrisingnumberofChinesebailoutstocountriesindistressoverthepast15years.ThispapershowsthattheChinesegovernmenthascreatedanewsystemofinternationalrescuelending,whichhasnotyetbeendocumentedorstudied.WefillthisgapbyexploringChina’sroleasaninternationallenderoflastresortforthefirsttime.

China’soverseasbailoutshavenotbeensystematicallyexaminedlargelyduetotheopacityofitsoverseaslendingpracticesandbilateraldebtrestructuringagreements(Hornetal.2021,Gelpernetal.2022;Dreheretal.2022).Weovercomethislimitationbyconstructinganew,comprehensive,hand-codeddatasetofChineseoverseasrescueloansfrom2000to2021.Specifically,westudytwomainpillarsofChina’semergingsystemofcross-borderbailouts.First,balanceofpaymentssupportviathePeople’sBankofChina(PBOC)swaplinenetwork,andsecond,liquiditysupportvialoansanddepositsfromChinesestate-ownedbanksandcommodityenterprises.

RegardingChina’soverseasswaplines,itiswellknownthatthePBOChasbuiltaglobalnetworkwithalmost40foreigncentralbankssince2008.Agrowingbodyofresearchhasfocusedonthedriversandeconomicimpactofthisgrowingswaplinenetwork,inparticularthepioneeringworkofBahajandReis(2022a,2022b).Thisliteraturehastypicallyfocusedonthedateonwhichthebilateralagreementissigned(e.g.LiaoandMcDowell2015,McDowell2019;Hornetal.2021,Perksetal.2021).However,mostoftheseswaplinesremaineddormantforyears.Ourpaperisthefirsttosystematicallytrackandquantifytheactualdrawingsontheselines.Wecodewhichcountriesmadedrawings,inwhatamounts,andwhen.ThisinformationiscrucialtounderstandtherelevanceandcontextofthePBOC’sswaplineusage,withsurprisinginsights.Officially,themainpurposeoftheswaplinesistopromotetheuseofRMBfortradeandinvestmentsettlementpurposes(Eichengreenetal.2017;Prasad2016).

1Asof2022,60%ofChina’soverseaslendingportfoliosupportsdebtorsindistress,upfromjust5%in2010(Hornetal.2022a).

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Wefindthattheswaplinesaremostlydrawninsituationsoffinancialandmacroeconomicdistressbycountrieswithlowreserveratiosandweakcreditratings.Outof17countriesthathavemadePBOCswaplinedrawingsthusfar,onlyfourdidsoinnormaltimes,withnoapparentsignsofdistress.Thisresultisconsistentwiththeliteratureaswellassurveysofcentralbankers,whichshowthatcountriesbuildupreservestoavertrollovercrisesanddefault.2ItisclearthatthePBOCswaplinedrawingsbolstergrossreservesandservethepurposeofwindowdressing(BahajandReis2022b),butthereisalackofclarityabouthowthefundsareactuallyused—especiallyiftheyareusedtodirectlyserviceexternaldebtstoChinacomingdue.3

Thus,amaininsightisthatChina’sswaplinenetworkhasbecomeanimportanttoolofoverseascrisismanagement.Intotal,wefindthat170billionUSDhavebeenextendedbythePBOCtocentralbanksofcountriesinfinancialormacroeconomicdistress.Thisamountinvolvesalargenumberofrollovers,asshort-termPBOCswaploansareoftenextendedagainandagain,resultinginadefactomaturityofmorethanthreeyears,onaverage.

Tosupplementournewdataonswaplinedrawings,wealsotrackbalanceofpaymentssupport(bridgeloans)fromChinesestate-ownedpolicybanks,state-ownedcommercialbanks,andstate-ownedenterprisestoEMDEcentralbanksandgovernments.Weidentifymorethan70rescueloansto13differentEMDEsworthof70billionUSD.TheseloansaremostlyUSD-denominatedandtheyoftenexplicitlyallowborrowerstousethefundstorepayexistingdebts,includingthoseowedtoChineseinstitutions.WealsotrackcommodityprepaymentfacilitiesthroughwhichChinesestate-ownedoilandgascompanies(likeCNPCandUNIPEC)providelargecashadvancesforcommodityimports.

Intotal,morethan20debtorcountrieshavereceived240billionUSDinChineserescuelendingsince2000.ThescaleofChina’sglobalbailoutlendingprogramisalsogrowingfast.Morethan185billionUSDwasextendedinthepastfiveyearsalone(2016-2021).

2AglobalsurveyofreservemanagersbytheIMF(2011,p.9)findsthatthemainmotivetoaccumulatereservesistobuildupa“bufferforliquidityneeds”.Relateldly,thereisalargeandgrowingliteratureshowingthathigherreservesdecreasetheprobabilityofdistressandcrises(e.g.Calvoetal.2012,GourinchasandObstfeld2012,Bianchietal.2018).

3Typically,neitherthePBOCnorrecipientcountrycentralbanksdisclosehowswaplinedrawdownscanbeused,inparticular,whethertheycanbeexchangedintoUSdollarsand/orrechanneledtorepayexternaldebtobligations.SeeSection2foramoredetaileddiscussion.AppendixFiguresA3andA4showforMongoliaandArgentinathatthePBOC’sswaplinedebtscancreatesignificantdifferencesbetweencountries’grossandnetreservepositionsandthereforeimprovewidely-usedearlywarningindices,suchasthereserve-to-importratio.Inselectedcases,creditratingagencieshavestartedtomonitorPBOCswaplinedrawdownstoassessinternationalreserveadequacyandpointtothesedrawingstoexplaintheirratingdecisions(e.g.Fitch2021and2022;Moody's2020).

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WethereforefindthatChinahasemergedasakeylenderoflastresortforagrowingnumberofdevelopingcountries.However,itsroleintheinternationalfinancialsystemislesscentral,byfar,thanthatoftheestablishedgloballendersoflastresort(Fisher1999;ReinhartandTrebesch2016).China’sbailoutsaresmallcomparedtotheIMF’sgloballendingportfolioanddwarfedbythesweepinginternationalUSDliquiditysupportextendedbytheU.S.FederalReserve(Fed)since2007,primarilytoadvancedeconomies.4WealsofindthatBeijinghastargetedalimitedsetofpotentialrecipients,asalmostallChineserescueloanshavegonetolow-andmiddle-incomeBRIcountrieswithsignificantdebtsoutstandingtoChinesebanks.

Insum,Chinahasdevelopedasystemof“BailoutsontheBeltandRoad”thathelpsrecipientcountriestoavoiddefault,andcontinueservicingtheirBRIdebts,atleastintheshortrun.China’sroleasaninternationalcrisismanagercanthereforebecomparedtothatoftheUSTreasuryduringpreviousLatinAmericandebtcrisesortoaregionalfinancialinstitutionliketheEuropeanStabilityMechanism,whichhelpedtoavert,delay,orresolvedefaultsbyhighlyindebtedborrowers,ratherthantoaglobalfinancialbackstopwith“deeppockets”(Rogoff1999,ScheubelandStracca2019,MitchenerandTrebesch2022,Reinhart2022,RoldanandSosa-Padilla2023).

4ComparinglendingamountsbyChina,theIMFandtheUSFedisnotstraightforwardbecauseofdifferentmaturitystructuresandfrequentrollovers.Forexample,whencountingallrollovers,Chineserescuelendingsince

2016correspondstoabout34%ofIMFrescuelendingcommitments.However,ifoneexcludesrolloversandonlycountstheinitiallendingamount,theChinesetotalcorrespondstoaround10%ofIMFrescuelendingcommitments(seeAppendixI.4fordetails).

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2.AnewdatasetofChina’sinternationalbailouts,2000-2021

Forthepurposeofdatacollection,wedefinerescueorbailoutlendingasanyformofofficialfinancialassistancethatallowsasovereigndebtorto(i)serviceexistingdebts,(ii)financegeneralbudgetaryexpendituresand/or(iii)shoreupforeignreserves(potentiallyenablingfuturerepayments—atleastforalimitedperiodoftime).5

Table1presentsatypologyofthedifferentcrisismanagementinstrumentsusedbyChinathatmeetthisdefinition,aswellasselectedcountryexamples.WeidentifythreevarietiesofChineserescuelending:(i)short-andmedium-termloansbystatebankstodevelopingcountriesthathavetheexplicitpurposeofbudgetaryandbalanceofpaymentsupport(“bridgeloans”),(ii)depositsatforeigncentralbanksandcurrencyswapdrawdownsfromthePeople’sBankofChina(PBOC)bilateralswaplinenetwork(consideringonlydrawingsindistresssituations),and(iii)commodityprepaymentfacilitiesthroughwhichChinesestate-ownedoilandgascompaniesprovidelargecashadvancesforcommodityexportingcountriesthatareindistress.

Table1.Chinesevarietiesofinternationalrescuelending

Lendinginstrument

ExampleCases

Rescueloans(generalpurpose/liquiditysupport)

Chinesestate-ownedbanks,inparticularCDB,haveprovided

Egypt2016,

USDcreditlinesthatallowrecipientstoserviceexternaldebts,increasereservesorfinancegeneralbudgetaryexpenditures

Belarus2019

Commodityprepaymentfacilities

ChineseoilimportershaveprovidedlargeupfrontUSDcashpaymentsonlong-termoildeliverycontracts

Ecuador2009

DrawingsfromPBOCswaplines

RecipientcountrycentralbankshavedrawndowntheirRMB

Argentina2014-2020,

swaplinestoincreasegrossreserves

Turkey2021

CentralBankdepositloans

ChinesebanksandthePBOChaveprovidedUSDdepositstoforeigncentralbankstohelpincreasetheirgrossreserves

Pakistan1997-2021

5Wetrackrescuelendingbyallstate-ownedChinesecreditorentities,regardlessofwhethertheyareconsideredofficialorcommerciallendersbytheChinesegovernment.CDB’sstatusinparticularremainscontested(see,forexample,Gelpernetal.2021).

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Rescuefinancingcanalsocomeintheformofequityinvestmentsindistressedprojects(likeChina’sinvestmentintheelectricitygridofLaosin2020)orintheformofsecondarymarketpurchasesofforeignsovereignbonds(asreportedlydonebythePBOCduringtheEuroZoneCrisis).Wedonottrackthesetwoinstrumentsduetoalackofreliabledata.6

a.Datacodingmethodology

Ourdatacollectioninvolvesthreesteps.First,wefocusonPBOCswaplinesandconductasystematicandencompassingreviewofofficialandnon-officialsources—includingtheannualreportsandfinancialstatementsofcentralbanksinborrowingcountries—thatprovideinformationaboutPBOCswaplinedrawingsandamountsoutstanding.Todoso,webuildonAidData’sTrackingUnderreportedFinancialFlows(TUFF)methodology(Custeretal.2021;Dreheretal.2022).Inadditiontocodingtheincidenceandmagnitudeofswaplinedrawings,wecollectcontextualinformationaboutthepurposeoftheswapdrawdowns,wheneveravailable.WeusethisinformationtodistinguishbetweenswapdrawdownsforbalanceofpaymentspurposesandthoseprimarilyusedfortradeandinvestmentsettlementinRMB(seethenextsub-section).

Second,wefocusoninternationalliquiditysupportoperationsbyChinesestate-ownedpolicybanks,commercialbanks,andenergyfirmstoEMDEgovernmentinstitutions,againusingtheTUFFmethodology.Inlinewiththeabovedefinitionofrescuelending,weidentifyallloansbystate-ownedChinesefirmsthatexplicitlyauthorizetheborrowertousetheproceedsto(a)repayexistingdebts,(b)financegeneralbudgetaryexpenditures,and/or(c)shoreupforeignexchangereserves.7Intotal,weidentify60billionUSDinliquiditysupportfacilitiesanddepositloansfromChinaDevelopmentBank,China’sstate-ownedcommercialbanks,andfromChina'sStateAdministrationOfForeignExchange(SAFE).8Wealsotrack9billionUSDincommodityprepaymentfacilitiesthroughwhichChinesestate-ownedoilandgascompanies(likeCNPCandUNIPEC)providecashadvancesforcommodityimports.Thesearrangements

6AllinstrumentslistedinTable1arecloselyrelatedtofinancingassurancesprovidedinthecontextofIMFprograms.Wedonotseparatelytrackfinancingassurancesbecausetheyconstitutefinancialpledgesthatdonotalwaysmaterialize.Rescuelendinganddebtrestructuringsthatinvolvegraceperiodandmaturityextensionscanhaveverysimilarreprofilingeffects.Here,wefocusentirelyonrescueinstrumentsthatprovidefreshfinancing.ForadiscussionofChinesedebtrestructurings,seeAckeretal.2020,BonandCheng2020,Hornetal.2022,Hornetal.2023.

7Ourinstrumentidentificationreliesonthestatedor“dejure”purposeoftheloans,butinAppendixI.3weshowthatthebalanceofpaymentsloansinourdatasetalsohavesignificantlydifferent“defacto”characteristicsthanChineseprojectloans.TheygotorecipientswithsignificantlyweakersovereignriskratingsandlowerforeignreserveholdingsthantherecipientsofChineseprojectloans.

8Thistotalincludes17rolloversofloansanddepositswithtotalcommitmentamountsof8.7billionUSD.

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arereminiscentofpreviousWesternrescueeffortstohelpenergyexportingcountriescopewithbalanceofpaymentsproblems—forexample,USoilprepaymentstoMexicoduringitsdebtcrisesof1982(Boughton,2001).

Inathirdstep,wevalidatethetransaction-leveldataextractedfromtheprimarysourcesbycomparingittoaggregatemacrodatapublishedbyrecipientcountryauthorities.WebenchmarkourresultstotheWorldBank’sQuarterlyExternalDebtStatistics(QEDS),whichcontainsaggregateinformationoncentralbankshort-termliabilities,aswellastoBOPdata.BothsourcesallowtotrackwhethersupposedinflowsfromChineseswaplinedrawingsarereflectedintheaggregateseriesoncentralbankliabilities.Overall,theaggregated,loan-by-loandatathatwemanuallycollectedcloselymatchestheaggregatefigurespublishedbycountryauthorities(seeAppendixFigureA1).

Inadditiontocodingtheincidenceandmagnitudeoflending(flowsandstocks),wecollectdataonborrowingterms—inparticulartheinterestrate,graceperiod,andmaturityaswellascollateralizationarrangements,wheneveravailable.AppendixIprovidesadetailedoverview.

b.PatternsofPBOCswaplinedrawings

AkeycontributionofthisgranulardatasetisthatitidentifiesthescopeandcontextofPBOCswaplinedrawings.Weshowthat,afteraslowstart,theswapnetworkhasnowbeenactivatedbyatleast17emerginganddevelopingeconomy(EMDE)centralbankswithtotaldrawdownsandrolloversofmorethan185billionUSD.Wealsofindthatswaplinedrawingshavebeenmadepredominantlybycentralbanksofcountriesinfinancialormacroeconomicdistress.Figure1showsthatthelargestdrawings(inpercentofdrawingrights)weremadebycountrieswhoseforeignexchangereservescoveredlessthan6monthsofimportsandwhosesovereignratingshadenteredjunkterritory(BBorlower).Thesepatternsarestatisticallysignificantbothacrosscountriesandwithincountriesovertime(seeAppendixTableA2):RMBswaplinesaredrawndownbyweakrecipientcountriesandtheytendtodosoduringparticularlybadtimes.

Furthermore,wecheckedthecontextofswaplineusageonacase-by-casebasisandfoundevidencethat13countriesmadetotaldrawingsof170billionUSDinsituationsofeconomicorfinancialdistress.ExamplesincludeArgentina(2014-2021),Mongolia(2012-2021),Suriname(2015-2021),andSriLanka(2021),whichdrewontheirRMBswaplinesrightbeforeand/oraftersovereigndefaultsontheirexternalcreditors.OtherimportantusersincludePakistan(2013-2021),Egypt(2016-2021)andTurkey(2021),whichmadelargedrawdowns

duringprotractedbalanceofpaymentscrises,asdemonstratedbytheircrashingcurrenciesin

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thefaceofdwindlingforeignexchangereserves.Anothergroup,includingRussia(in2015and2016)andUkraine(in2015)activatedtheirswaplinesinthefaceofsanctionsanddeepgeopoliticalcrises.AppendixTableA3providesafulllist,whileAppendixIIpresentsthreedetailedcasestudies.

Atthesametime,weonlyidentifyfourcountriesthatutilizedtheirPBOCswaplineswithoutanyindicationofmacroeconomicdistressand,thus,likelyfortradeandinvestmentpurposesalone.ThesefourcountriesareMalaysia,Singapore,SouthKoreaandThailand,withcombineddrawdownsof15billionUSD(seeAppendixIfordetails).WeexcludethesefourcountriesfromouranalysisofChineserescuelendinginSections3and4below.

Figure1.China’sswaplinesaremostlyusedbycountriesindistress

PanelA.FXreservesandPBOCswaplinedrawings

PanelB.SovereignratingsandPBOCswaplinedrawings

Note:ThisfigurelinksthescaleofChineseswaplinedrawings(inpercentoftotaldrawingrightsgrantedbythePBOC)tothecountry’slevelofreservestoimports(PanelA)anditssovereignriskrating(PanelB).ReservestoimportsdataisfromtheWorldBank’sWDIdatabase,dataonsovereignriskratingsisfromKoseetal.(2022)andfromReinhart,ReinhartandTrebesch(2016).SeeAppendixIforregressionresults.

AkeyquestioniswhetherPBOCswaplineproceedscanbeusedfordebtservicingornot.

Giventheopacitysurroundingtheseswaplines,systematicevidenceisdifficulttofind,but

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individualcountrycasesprovideimportantinsights.InArgentina,thecentralbanksignedasupplementaryagreementwiththePBOCthatexplicitlyallowsittoexchangeRMBdrawingsintoUSDandtousethemforexternaldebtservice(seeAppendixII).However,ifnosuchauthorizationisgrantedbythePBOC,thenswaplinedrawingsmaybeofmorelimiteduseinabalanceofpaymentsordebtcrisis.InSriLanka,thecentralbankreportedlysignedanagreementwiththePBOCthatallowsfortheflexibleuseofswaplineproceedsundertheconditionthatthecountry’sgrossreservesremainabovetheequivalentof3monthsofmerchandiseimports—orapproximately4billionUSD(seeAppendixII).9Butevenwhensuchrestrictionsontheuseofswaplineproceedsareinplace,thefungibilityofforeignexchangereservesensuresthatswaplinedrawdownscanfacilitatedebtservicepaymentsbyfreeingupothersourcesofforeignexchange.10

Theexpansionofswaplinedrawingshascomplicatedthechallengeofmonitoringdebtvulnerabilitesinthedevelopingworld.Inprinciple,PBOCswaplineborrowingsrepresentshort-termrepaymentobligationsthatfalloutsidemostexistinginternationaldebtdisclosurerequirements(sincetheyhavedejurematuritiesof3-12months).11However,duetotheirfrequentrollovers,manyoftheseborrowingshavedefactomaturitiesthatsubstantiallyexceedoneyearandthatshouldbereportedasexternalpublicdebtobligations.Inpractice,onlyveryfewdevelopingcountriesincludeswaplinedebtintheirpublicdebtreporting.InanefforttoadaptdatacoveragetotheevolvingnatureofexternaldebtandthegrowingimportanceofPBOCswaplines,since2020,theWorldBankrequiresthereportingofcentralbankswapdebtandforeignofficialdepositswithdefactomaturitiesofmorethanoneyearthroughtheDebtorReportingSystemthatunderliestheInternationalDebtStatistics(seeWorldBank2020).Withrespecttoreserveadequacymetrics,ithasbecomeclearthatswaplinedebtcancreatesubstantialdiscrepanciesbetweengrossandnetreserveadequacymetrics(AppendixFiguresA3andA4illustratethisforArgentinaandMongolia).Thishasimportantimplicationsfor

9ThisconditionhasprovenconsequentialbecauseSriLanka’sgrossreservesfellbelowthisthresholdbeforeandafteritdefaultedonitsexternalsovereigndebtsinApril2022.

10SeeforexampleObstfeldetal.(2009)foradiscussionoffungibilityinthecaseofRussia.

11Thelong-term,publicandpubliclyguaranteed,externaldebtstockspublishedintheWorldBankInternationalDebtStatistics,forexample,“includealllongtermexternaldebt,thatis,debtwithanoriginalmaturityofmorethanoneyear,andowedbyresidentsofthereportingcountrytononresidentsthereof”(WorldBank2000:3,emphasisadded).

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countrysurveillancework,inparticularwhencentralbanksdonotdisclosetheiroutstandingswaplinedrawings.12

3.BailoutsontheBeltandRoad

ThissectionsummarizesthemaininsightsonChina’srescuelendingfromourdataset.Figure2documentsasharpincreaseinChinesebailoutactivityovertime,distinguishingbetweenswaplinelending(intotalUSD170billion)andothertypesofrescuelending—inparticular,bridgeloansorbalanceofpaymentssupportbyChinesestate-ownedbanksandenterprisesliketheCDB(intotalUSD70billion).Thisfigurecountseachindividualborrowingseparately,irrespectiveofwhetheritisanewloanorarolloverofapreviousloan.Ifwedisregardrollovers,thetotalamountofextendedcreditdeclinesfrom240billionUSDtoroughly100billionUSD.

Figure2.China’sbilateralbailouts-yearlyamountsofcross-borderrescuelending

Note:Thisfigureshowstheyearlyaggregateamountofnewlyextendedrescueloansbasedonournewdataset.RedbarsshowtotaldrawdownsfromPBOCswaplines(incl.rollovers)forbalanceofpaymentspurposes.Fourrecipientcountrieswithnoindicationoffinancialdistressareexcluded.GreybarsshowtotalcommitmentsfromBOPsupportloansbyChinesestate-ownedbanksandenterprises(againincl.rollovers).ThegreybarsalsoincludedepositsbyChinesebanksatforeigncentralbanksaswellcommodityprepaymentfacilities(seeAppendixIfordetails).

12Swaplinedebtisnotuniqueincreatingagapbetweengrossandnetreserves.Centralbankdebtissuanceandcommitmentsintheforwardexchangemarketcanhavesimilareffects,aswasthecaseintheAsianFinancialCrisis(seee.g.Goldstein1998).

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Figure3.Chinesecross-borderbailoutsbycountry

Note:ThisfigureshowstheincidenceofChinesebilateralbailoutsbyrecipientcountryandyear.SeeSectionIIandAppendixIforsourcesanddetailsondatacollection.

Intermsofincidence,weidentify128separaterescuelendingoperations.Mostofthesearerollovers,meaningloansreneweduponmaturityandgoingtothesamecountry.Indeed,Figure3showsthatsomedebtors,likeArgentina,MongoliaorPakistan,havereceivedcontinuousbalanceofpaymentssupportfromChinesebanksandthePBOC.13ThesetypesofrepeatedbailoutsbyChinaarereminiscentofthe“seriallending”practicesbytheIMFinrecentdecades(ReinhartandTrebesch2016)andmorebroadly,theserialrestructuringsandbridgecreditsbyprivatecreditorsprevalentduringthe1980sdebtcrisis(CrucesandTrebesch2013).RepeatedrolloversalsoimplythatthedefactomaturitiesofChineserescueloansarelongerthantheirrelativelyshortdejurematuritiessuggest.PBOCswaplinedrawings,forexample,areinitially

13Anearlyexampleofsuchserialrescuelendinggoesbacktolate1990swhenoneofChina’sneighbors—Pakistan—experiencedanacuteshortageofforeignexchangereserves.BankofChinaissuedth