Contractor-Supporting Debt: The Role of Chinese Infrastructure Firms in Shaping Sovereign Lending

China’s rise as the world’s largest bilateral creditor has reshaped sovereign lending in the Global South, yet the role of Chinese infrastructure contractors in this process remains underexplored. This paper investigates how Chinese sovereign loans facilitate the overseas expansion of Chinese contractors, creating a selfreinforcing cycle in African markets. Drawing on a novel dataset of the top 250 global infrastructure contractors in 38 African countries from 2005 to 2020, combined with African Debt Database (ADD) and case studies from Zambia and Nigeria, we demonstrate that a lower presence of Chinese contractors in a given year predicts higher future Chinese loans, which in turn attract more contractors. Using an instrumental variable approach and placebo test to address endogeneity, we provide robust evidence for this dual dynamic. We find that debt sustainability moderates this relationship, with high-debt countries seeing a stronger negative effect of contractor presence on future loans, reflecting China’s risk sensitivity. These findings challenge state-centric explanations of Chinese finance and highlight the co-constitutive role of firms and financiers, revealing a dynamic state–firm nexus at the heart of China’s development finance model.