Why do many countries prefer to loan from China and not the World Bank or IMF even if the Chinese loans are often more expensive?

 Several factors contribute to countries choosing to borrow from China rather than traditional lenders like the World Bank or IMF, even when Chinese loans may be more expensive. One key factor is that China's lending approach often involves fewer conditionalities compared to international financial institutions. Many countries appreciate the flexibility provided by China in terms of project implementation and policy adjustments.

China's loan approval process is typically quicker and less bureaucratic compared to the World Bank or IMF, allowing nations to access funds more promptly. This speed can be critical for countries facing urgent economic or infrastructure needs. Additionally, China's loans are often characterized by fewer governance and policy-related conditions, giving borrowing countries more autonomy in decision-making.

Political considerations also play a role. China's approach to lending may be perceived as less intrusive in a country's internal affairs compared to the conditionalities imposed by traditional lenders. Some nations prefer the sovereignty that comes with Chinese loans, as they may not want external entities influencing their domestic policies.

Furthermore, China's Belt and Road Initiative (BRI) has been a significant driver of its lending practices. The BRI aims to enhance global trade connectivity and infrastructure development, and Chinese loans are often tied to projects aligned with this initiative. Countries may see participating in the BRI as a way to boost their economic development and strengthen bilateral ties with China.

It's crucial to note that while Chinese loans may offer advantages in terms of flexibility and speed, concerns have been raised about the potential debt burden on borrowing countries, as Chinese loans are sometimes criticized for being more expensive than those from international financial institutions. The decision to borrow from China or other lenders is complex and depends on a country's specific circumstances, priorities, and the terms offered by each lender.