China Lenders Freeze $2.1 Billion Debt Payments for Poor Nations
China Lenders Freeze $2.1 Billion Debt Payments for Poor Nations
(Bloomberg) -- Chinese lenders suspended $2.1 billion in debt repayments from nearly two dozen nations, while the country’s finance minister called for a multilateral debt-relief facility to ease the burden on the world’s poor amid the coronavirus pandemic.
Chinese Finance Minister Liu Kun said official creditors China International Development Cooperation Agency and the Export-Import Bank of China suspended $1.353 billion in payments from 23 nations. China Development Bank, which Beijing considers a commercial lender, froze $748 million, he said in a statement.
Still, the deferral is less than a third of an estimated $7.2 billion owed to Chinese lenders by poor countries that are eligible for a payment moratorium between May and December of this year, according to World Bank data.
The Group of 20 leading economies, which includes China, agreed in April to temporarily suspend debt payments from 73 of the world’s poorest countries. The G-20 extended the debt relief until at least the first half of 2021 and agreed on a common framework to rework the debt of those countries suffering the most from the effects of the pandemic.
World Bank President David Malpass has publicly questioned China’s participation in the debt-suspension initiative and called on Beijing to offer more relief as the world’s largest official creditor. Other Western governments have also expressed doubts about China’s commitment to a common strategy to overhaul billions of dollars in sovereign debts.
Liu in his statement fired back and called on the World Bank to help debt-laden countries by setting up a multilateral debt-relief facility that China will consider contributing to.
“The World Bank, as a major multilateral creditor, should take part in debt treatments and explore various options to provide more support to the poorest countries in alleviating their debt burden,” Liu said. “If the World Bank takes part in debt treatment through setting up a multilateral debt-relief facility, China will positively consider contributing to the facility.”
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With assistance from Bloomberg