China’s position as a top source of financing for developing countries has shifted meaningfully in recent years, according to the inaugural analysis from the ONE Data initiative. The report shows a significant fall in new lending from China to lower-income nations while debt-service payments on earlier loans remain elevated, producing net outflows to China for many countries.
Net flows have swung against borrowers
ONE Data’s analysis finds that in a number of low- and middle-income economies - with the strongest effects concentrated in Africa - repayments to China now exceed the amount of fresh credit those countries are receiving from the world’s second-largest economy. Where new loan disbursements have slowed, the continued obligation to service past borrowing is driving money out instead of in.
David McNair, executive director at ONE Data, summed up the dynamic: "The fact that there’s less lending coming in, but that previous lending from China still needs to be serviced - that’s the source of the outflows."
Multilateral lenders increase their relative role
While bilateral flows from China have fallen, multilateral institutions have raised their net financing markedly. The report records a 124% rise in net financing from multilateral lenders over the past decade, who now account for 56% of net flows. In dollar terms, this amounted to $379 billion in net financing between 2020 and 2024.
That rise has made multilateral sources the primary provider of net development finance once debt-service payments are taken into account, offsetting some of the shortfall from bilateral lenders.
Africa sees the largest swing
The report highlights Africa as the region most affected by the shift. During 2015-19 the continent experienced a net inflow from China of $30 billion; in the 2020-24 period that position reversed to a net outflow of $22 billion. The dataset used in the analysis does not include policy changes and cuts that took effect in 2025.
The closure of the U.S. Agency for International Development last year, combined with reductions in allocations from other developed countries, has already weakened external financing for developing economies, particularly across Africa. McNair said once 2025 data are published it is likely to show a substantial drop in Official Development Assistance flows.
Policy and fiscal implications
ONE Data interprets the trend as "a net negative" for many African governments, which face tighter budgets for public services and capital investment as external financing wanes. At the same time, the organization noted that reduced dependence on external borrowing could increase domestic accountability, as governments rely more on internal financing sources.
The report also points to a broader weakening in bilateral finance flows and a decline in private external debt - developments that are expected to be intensified by the aid reductions that came into effect in 2025.
Where the analysis is limited, the report is explicit: the most recent datasets stop at 2024 and do not incorporate the 2025 policy changes and cuts, meaning the full financial impact on developing country balance sheets may be larger once those numbers are included.