China says more debt relief, supports G-20 coordination

China said it has signed more debt freeze deals with poorer countries and is pushing for closer cooperation between the world’s largest economies in a bid to ease the tax burden on countries struggling with it. the coronavirus pandemic.

“We have signed debt relief agreements with the majority of countries that have requested it and are holding consultations with the remaining countries,” the Foreign Office said Friday in a written response to Bloomberg’s questions.

In addition, China’s unofficial lenders have also granted holidays to troubled debtor countries in accordance with the terms of the Group of 20 major economies’ debt service suspension initiative, the ministry said.

The statement comes two weeks before G-20 finance ministers and central bankers convene for an extraordinary meeting to discuss the next phase of the global debt relief campaign. So far, more than 40 countries have requested a postponement of $ 5 billion in official bilateral debt payments, according to the Institute of International Finance.

After some opposition, emerging economies led by China, the world’s largest official lender, agreed to a common framework for restructuring bilateral debt at the last G-20 ministers meeting this month. The group also extended the debt suspension until at least the first half of 2021.

A common strategy means closer coordination with the Paris Club of creditors in what Western governments hope they can convince China to increase its role in debt relief efforts. The club is a group of mostly Western creditor governments.

In response to questions about its commitment to the new framework, the Foreign Ministry said China “supports all parties to take new joint measures.”

Finalizing the details of this plan could take time, however, said Mark Bohlund, senior credit analyst at REDD Intelligence.

“They will eventually come to a common framework,” said Bohlund. “In principle, China is not against this, but they are unhappy with the DSSI and they want a multilateral response, including an increase in IMF lending. The feeling is that they are taking on too much of a burden.”

World Bank President David Malpass complained that China had not done enough to ease the debt burden of poor countries, leaving the China Development Bank, a major overseas lender, in apart from the debt relief initiative. China owes nearly 60% of the bilateral debt that the world’s poorest countries are expected to repay this year.

China also called on development banks and trade institutions that are not part of multilateral debt relief agreements to “help ease the debt burden of developing countries,” the statement said.

This story was posted from a feed with no text editing.

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