Does Chinese policy banks' overseas lending favor Belt Road Initiative countries?

Xin CHEN, Heyang FANG, Yun LIU*, Yifei ZHANG

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)peer-review


This paper examines how Chinese policy banks responded to China's Belt Road Initiative (BRI) using transaction-level international syndicated loan data. Employing a difference-in-differences (DID) estimation, we show that Chinese policy banks increased aggregate lending (number of loans and loan amounts) to firms from the BRI countries compared to those from the non-BRI countries after the initiative. This increase was more pronounced among firms along the continental route and in the infrastructure sectors. We also find that Chinese policy banks' loans to the BRI borrowers were associated with reduced spread, lowered collateral requirement, and extended maturity. Moreover, our results suggest that Chinese policy banks gave more support to firms from the BRI countries with weaker economic performance, more fragile institutional quality, and closer political interests. Overall, our study highlights the supportive role played by Chinese policy banks in implementing a national globalization strategy.
Original languageEnglish
Number of pages29
JournalInternational Studies of Economics
Publication statusE-pub ahead of print - 17 Jul 2022


  • Belt Road Initiative
  • Chinese policy banks
  • global syndicated loans


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