China's Transformation from Development Recipient to Provider

China experienced a rapid transformation from being a recipient of development finance to becoming a dominant provider. In the late 1990s, China adopted the 'going out' strategy to scale up its overseas grant giving and lending activities. This was driven by the stockpiling of US dollars from recurring trade surpluses. When US Treasuries delivered a less favorable rate of return, China started giving dollars to their banks for more favorable returns.