When a port gets built in Pakistan, a railway cuts through Kenya, or a bridge opens in Serbia, there is often a financial institution behind the deal that most Western business executives have never heard of: the China Development Bank (CDB) or the Export-Import Bank of China (China Exim). Together, these two policy banks have deployed more development financing than the World Bank over the past decade, reshaping global infrastructure and creating commercial opportunities that far-sighted Western companies are only beginning to understand.
Two Banks, One Strategic Mission
The China Development Bank was established in 1994 as a state-owned development finance institution reporting directly to the State Council. With total assets exceeding $2.2 trillion as of 2025, CDB is the world’s largest development bank by assets, dwarfing the World Bank’s $400 billion balance sheet. It raises capital by issuing bonds on domestic and international markets, backed implicitly by the Chinese government.
The Export-Import Bank of China, founded the same year, carries roughly $750 billion in assets and a formal mandate to support Chinese exports, outbound investment, and the overseas construction projects that have come to define China’s economic footprint across Asia, Africa, Latin America, and Eastern Europe. Both institutions are instruments of Beijing’s strategic economic agenda. When China decides to build a port in Sri Lanka or a power plant in Angola, it is typically CDB or China Exim that structures and funds the sovereign loan.
The Mechanics of a Policy Bank Deal
Concessional Loans and Buyer’s Credits
China Exim offers two primary loan categories. Concessional loans carry below-market interest rates of 2 to 3 percent with 15 to 20-year repayment periods, reserved for least-developed countries and tied explicitly to Chinese contractors, equipment, and labor. Preferential export buyer’s credits are closer to commercial terms but still structured to support the purchase of Chinese goods and services.
CDB lends primarily at near-commercial rates to governments with stronger credit profiles. Its loans are larger on average and are used extensively across Southeast Asia, Eastern Europe, and Latin America where host governments prefer Chinese financing over tapping bond markets.
Resource-Backed Loans
A defining feature of China’s policy bank lending in resource-rich countries is the resource-backed loan model. Angola, Ecuador, and Venezuela have all received large facilities collateralized by future oil or mineral exports. These arrangements ensure repayment regardless of the borrower government’s fiscal position — a mechanism that Western development finance institutions have historically been reluctant to adopt but that reflects a pragmatic response to high perceived political risk in frontier markets.
Scale and Geographic Reach
Research from Boston University’s Global Development Policy Center recorded over $860 billion in commitments from CDB and China Exim between 2000 and 2022 across 165 countries. Sub-Saharan Africa received the largest share in earlier years, with major projects including the Addis Ababa-Djibouti Railway ($3.4 billion, China Exim) and the Standard Gauge Railway in Kenya ($3.2 billion).
In Southeast Asia, the $6 billion Laos-China Railway connecting Kunming to Vientiane opened in 2021. In Eastern Europe, CDB has financed motorway projects in Hungary, power plant upgrades in Serbia, and port terminal expansions in Greece through COSCO’s Piraeus investment. The Belt and Road Initiative has served as the political umbrella under which most of these projects have been negotiated, but the financial mechanics are driven by CDB and China Exim.
The Contractor Selection Question
Western firms frequently ask why they cannot compete for Chinese policy bank-funded contracts. Most concessional loans are tied — the borrower government is contractually required to use Chinese companies as primary contractors. This is not unique to China; Japan’s JICA and South Korea’s EXIM Bank operate similar tied-aid structures. The difference is scale.
The picture is more nuanced in two important ways. First, Chinese contractors almost always require specialized Western inputs: advanced tunneling equipment, power generation turbines, specialist engineering software, and environmental compliance systems. Siemens, Alstom, and ABB have all won subcontracts on Chinese-financed projects in Africa and Asia. Second, as Chinese contractors have expanded globally, local procurement requirements from host governments and multilateral co-funders have created genuine opportunities for Western-affiliated regional suppliers. The key is identifying the Chinese prime contractor early in the project cycle and establishing relationships before contract award.
How State Firms and Policy Banks Work Together
The relationship between policy banks and Chinese state-owned enterprises is symbiotic. CDB and China Exim provide the sovereign loan. A Chinese SOE — from the construction, rail, energy, or building materials sector — wins the EPC (engineering, procurement, and construction) contract. Loan proceeds flow back through the Chinese contractor to Chinese suppliers of equipment, cement, steel, and rolling stock.
This is why CRRC’s global rail contracts and the overseas expansion of firms like CNBM are inseparable from the policy bank system. These companies compete on price in part because their projects are financed at below-market rates. Understanding this system is not about criticizing it — it is about navigating it intelligently.
The Western DFI Response
Western governments have recognized that their own development finance institutions cannot match China’s volume but can compete on quality, governance standards, and total project economics. The US International Development Finance Corporation (DFC), which replaced OPIC in 2019, received a $60 billion authorization and has launched the Partnership for Global Infrastructure and Investment alongside G7 partners. The EU’s Global Gateway initiative targets €300 billion in infrastructure investment by 2027.
According to the US International Development Finance Corporation, these initiatives focus on clean energy, digital infrastructure, and strategic port and rail corridors. China’s official position, articulated through the Ministry of Commerce of the People’s Republic of China, is that its development finance represents South-South cooperation respecting host country sovereignty without political conditionality — a framing that resonates strongly across the Global South.
Practical Opportunities for Western Firms
Project Pipeline Intelligence
CDB and China Exim do not publish full project pipelines, but intelligence is available through China’s Ministry of Commerce project approval notices, host country procurement registries, and specialist databases maintained by organizations such as the SAIS China Africa Research Initiative and AidData at William and Mary. Firms in engineering, power, logistics, and building materials should monitor these channels systematically.
Partnering With Chinese Prime Contractors
The most direct path to participation for a Western company is a supply or subcontracting agreement with the Chinese EPC contractor. This requires building relationships in China before projects are awarded. Companies that have invested in China offices, joint ventures, or long-term supplier relationships with major state constructors — CSCEC, Power Construction Corporation of China, CRRC, CNBM — are significantly better positioned than those approaching the market reactively. As our analysis of China’s investment ecosystem demonstrates, relationship infrastructure is as important as financial capital.
Co-Financing With Western DFIs
A growing number of infrastructure projects in frontier markets are co-financed by a combination of Chinese policy bank lending and Western DFI equity or guarantee instruments. This blended finance structure allows host governments to access Chinese-priced debt while satisfying ESG requirements that increasingly matter for project bankability. Western professional services firms in legal, environmental, and financial advisory roles have found consistent work structuring these hybrid arrangements.
The Road Ahead
CDB and China Exim are not retreating. Despite a slower pace of new commitments after 2016 — partly a response to debt sustainability concerns raised by Belt and Road partner countries themselves — both institutions remain the world’s largest bilateral infrastructure lenders by a significant margin. Emphasis has shifted from large greenfield megaprojects toward smaller, more targeted investments in digital infrastructure, clean energy, and healthcare facilities.
For Western companies, the strategic imperative is clear: understanding how China’s policy banks operate is no longer optional knowledge for firms doing business in emerging markets. Whether your company is competing against Chinese-financed rivals, seeking to supply into Chinese-led projects, or advising governments on infrastructure finance, CDB and China Exim are counterparties you need to understand as thoroughly as any major financial institution. The global infrastructure financing landscape is defined by the intersection of Chinese policy capital and Western governance standards. Companies that navigate both fluently will consistently find more opportunity than those who treat either system as impenetrable. The U.S. Department of State’s economic growth and environment policy documents America’s competing infrastructure finance strategy, providing essential context for companies weighing Chinese and Western-backed project financing options.