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Browsing: Chinese debt
Consequently, China has carefully abandoned its strong preference for bilateral dealing with problem debtors. The Chinese state avoids being a rule-taker compared to the West on debt issues. Still, it increasingly appears to recognize that multilateral approaches – ideally on an ‘a la carte’ basis – can help contain both the pressures on its African partners and its challenges.
China, therefore cautiously supported the DSSI for some African nations when it came to effect in April 2020, and similarly, the Common Framework launched in 2021. However, the slow implementation of the Common Framework brings to light four specific challenges linked to China’s role.
First is China’s discomfort with the independent and central role played by the IMF in controlling how much a country can afford to pay through its debt sustainability analysis (DSA). Second is the alarm of privates, and public sector lenders in the West over a lack of …
Globalization has encouraged open trade between continents. In a bid to gain economic dominance, the top industrialist nations have engaged in sometimes aggressive foreign policies to secure natural resources to support their growing industries. Although this is not entirely negative, there needs to be an objective analysis of whether such relations are mutually beneficial, or one party is left prejudiced while the other has gained.
One such relationship that has garnered controversy over the past few decades is the China-Africa affiliation. This article will analyze relations between China and Africa in the context of the political, economic, and ecological environments.
Chinese interests in fostering African relations
Africa enjoys the second largest Chinese investment, after Asia. The predominant reason for this being that Africa is endowed with an abundance of natural resources and China is eager to benefit from these resources in its pursuit of economic dominance. The main interests that …
China Development Bank
The Zambian government announced an agreement with the China Development Bank (CDB) to defer a loan repayment that fell due in October 2020. The terms of the deal include a halt on interest payment for six months, with payment of interest expected to resume in April 2021. The principal due was also postponed and will be rescheduled over the entire loan period. Chinese lenders are not known for their flexibility which is why the deal comes as a welcome shock.
I’m glad to learn that China Development Bank has reached a debt deferral agreement with Zambia. This fully shows that in addition to official creditors, other Chinese financial institutions are also actively resolving the debt issue of Zambia and other African countries.
Wu Peng, Director-General, Department of African Affairs, MFA, China on Twitter
The government did not, however, disclose the size of the debt or the …
