The World’s Wallet?

China’s economic success has led to the accumulation of the world’s largest foreign exchange reserves. The chapter discusses the role played by Chinese sovereign wealth funds in reinvesting reserves abroad, as well as the growth of foreign lending by the Chinese banks and the expansion of export credit, with particular attention to the activities of the China Development Bank and the China Exim Bank. Chinese aid has been particularly controversial, with widely differing claims regarding the volume of aid that China gives. The chapter discusses the scale of aid and the key features of the way in which Chinese aid is organized. It identifies the main drivers of Chinese financial flows, distinguishing between the different types. It concludes with a discussion of the wider implications of the growth of Chinese finance for development finance and the access of countries which have been marginalized by traditional lenders.