The Impact of Debt Relief to Africa on Creditor Countries’ Product Exports: Evidence from China

This study empirically examines the impact of China’s debt relief to Africa on China’s product exports. We further enhance the proper understanding of the debt relief behavior of creditor countries compared to previous studies that focused only on the impact of debt relief on debtor countries. The results suggest that China’s debt relief to Africa helps to drive the expansion of China’s product exports to Africa. The impact is realized through two direct channels: increasing targeted purchases by debtor governments and reducing China’s trade costs with debtor countries, as well as two indirect channels, which are promoting the economic development of debtor countries and enhancing China’s national image. This study demonstrates the positive impact of debt relief on creditor countries and extends the scope of research on debt relief in Africa.