Asia’s Debt Handoff: Who Finances the Post-BRI Era?
On October 12, on the sidelines of the IMF-World Bank Annual Meetings in Bangkok, the Borrowers’ Platform held its first Governing Council and set out priorities for its first annual cycle. Launched in April with U.N. Trade and Development (UNCTAD) as its secretariat, the platform is a forum for borrowing countries to strengthen debt management, coordinate positions, and speak with a stronger collective voice in global debt discussions. Several developing countries have already formally joined, and many more have been invited to participate.
The Bangkok meetings were dominated by an energy supply shock linked to the war in West Asia, which has landed alongside rising interest rates and public debt at its highest level since World War II. Developing countries are facing some $400 billion in payments to external creditors this year.
Beneath these headlines, a subtler shift is underway in Asia’s development finance. China, the region’s most dynamic lender in the 2010s, now collects more from developing countries than it lends, while the World Bank and the Asian Development Bank (ADB) have become more important sources of new money. The next phase of Asia’s debt diplomacy will be shaped not merely by who supplies fresh capital, but by how borrowing countries coordinate creditor negotiations, manage net financial flows, and preserve fiscal space for future development.
The arithmetic of China’s Belt and Road Initiative (BRI) has turned. Loans contracted during the lending boom of the mid-2010s, typically with grace periods of three to five years, have now entered their repayment phase. In fact, data show that China’s net flows to developing countries fell to negative $34 billion in 2024, and the number of countries for which China was a net drain rose from 18 in 2012 to 60 in 2023. In 2025 alone, developing countries were expected to pay an estimated $35 billion in debt service to Beijing.
Multilateral lenders, meanwhile, are lending more. According to the World Bank’s International Debt Report 2025, its own net flows to low- and middle-income countries reached a record of about $36 billion in 2024, with multilateral creditors providing nearly half of all long-term net financing. Bilateral net flows, by contrast, fell to about $4.5 billion, the lowest since the global financial crisis.
China has not exited the loan landscape. Beijing continues to roll over maturing loans, extend swap lines, and defer repayments for its most exposed partners. But the character of its engagement has changed from greenfield project finance toward liquidity management, keeping borrowers current rather than expanding their investment frontier.
This change can be seen playing out in Pakistan, Sri Lanka, and Laos – three economies with deep BRI exposure, where multilateral finance increasingly sits alongside, and is shaped by, legacy Chinese obligations.
In Pakistan, the fiscal calendar is dominated by repayments. In July 2026, Islamabad paid $1.3 billion in Chinese commercial loans used to fund CPEC projects. Pakistan’s government has asked Beijing to fast-track the refinancing of this debt. During the current fiscal year, Pakistan will need about $12 billion in rollovers from China and Saudi Arabia.
At the same time, the World Bank has committed to a 10-year partnership with Pakistan, envisaging about $20 billion in financing over 2026-35. The most telling case is the modernization of the Main Line-1 railway from Karachi to Peshawar, long described as a flagship project of the China-Pakistan Economic Corridor. After years of negotiations failed to produce a Chinese concessional package, its Karachi-Rohri section is now set to begin with proposed ADB financing of $1.1 billion, a sequencing the government says was agreed with Beijing.
Sri Lanka, which signed agreements in June 2024 to restructure about $4.2 billion owed to China’s Export-Import Bank, now relies heavily on multilateral liquidity. In 2025, the IMF and ADB together provided nearly 80 percent of the roughly $1.48 billion in foreign development financing disbursed to Colombo, and the ADB has since raised its 2026 allocation to US$480 million following Cyclone Ditwah.
Laos illustrates the other extreme: continued reliance on Chinese lending. Rather than restructure its debt, since 2020 Vientiane has relied on repeated deferrals from Beijing that total $3.23 billion, about 19 percent of its GDP. The World Bank projects Lao debt service will equate to 13 percent of GDP in 2026, a fiscal burden that directly limits spending on health, education, and social protection.
Multilateral loans are earmarked for railways, social protection, or disaster recovery, but money is fungible at the level of the budget and the balance of payments. Every dollar that a development bank finances frees up a dollar of domestic revenue or foreign reserves that can be used to service bilateral debt. Fresh multilateral finance may therefore be expanding investment capacity on paper while, in practice, buying fiscal breathing room to meet legacy Chinese obligations.
A more diverse creditor base can strengthen a borrower’s hand, since multilateral lending brings concessional terms, competitive procurement, and greater transparency, and credible alternatives are themselves a source of leverage when negotiating with several creditors at once. Yet the shift carries costs of its own.
Multilateral finance comes with policy conditions, and because multilateral development banks enjoy preferred creditor status, their loans are effectively excluded from restructuring. As their share of the debt stock rises, more of a country’s debt becomes non-negotiable, and any future crisis would weigh more heavily on the remaining bilateral and private creditors. If multilateral resources are also seen to be financing repayments to another official creditor, shareholder support for continued lending could become harder to sustain. Asian borrowers could thus exchange one form of dependence for another, with less room to maneuver in the next downturn.
This is where the Borrowers’ Platform could add value, mainly through technical cooperation rather than collective bargaining. For instance, Sri Lanka’s experience of negotiating in parallel with an official creditor committee, China, and bondholders is precisely the kind of institutional knowledge that Laos or Pakistan could use. Members could also share approaches to tracking net flows by creditor, sequencing refinancing to avoid repayment cliffs, and adopting debt pause clauses that suspend payments during climate disasters and other crises.
In this setting, the central question is no longer simply whether Beijing or the development banks will finance Asia’s next decade, but whether borrowing countries can manage the transition on their own terms. The post-BRI era will therefore reward governments that track net flows rather than headline pledges and, most importantly, protect space for development spending.
