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China should be willing to take losses on loans to struggling economies, Bloomberg reported, citing India's G20 Sherpa Amitabh Kant.
"China needs to come out openly and say what their debt is and how to settle it," he said, adding that it is not possible that a haircut taken by the IMF [International Monetary Fund] goes to settle Chinese debt.
Western lenders, including the Paris Club of creditors, have asked China to stop going solo [bilateral] on debt relief, the report noted.
Last week, China urged the IMF to provide a loan to Sri Lanka as soon as possible to relieve the country's liquidity strain, Foreign Ministry spokesperson Mao Ning said. Earlier, she said that China played a constructive role in handling Zambia’s debt under the G20 common framework
In April 2022, the IMF’s Guillaume Chabert, Martin Cerisola, Dalia Hakura wrote that “China is now the largest official bilateral creditor in more than half of DSSI [G20 Debt Service Suspension Initiative] countries, including when counting all 22 Paris Club creditors as a single pool. China would therefore play a key role in most DSSI countries’ debt restructurings that would involve official bilateral creditors.”
That same month, China Foreign Minister and State Councillor Wang Yi said Beijing would waive 23 interest-free loans to 17 African countries, which matured by end-2021.
Also read:
China, U.S. to participate in first meeting of new debt roundtable on Feb. 17
Zambia criticises debt restructuring delays – FT
(Writing by P Deol; Editing by Anoop Menon)
