Chinese Contracts Could Complicate Sovereign Debt Restructuring
- China has emerged as a major lender over last decade
- Few official lenders from any nation make contracts public
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Developing countries’ ability to renegotiate their overseas borrowing could be complicated by contracts with Chinese state-lenders which include confidentiality clauses and exemptions from restructuring, according to a new report.
China has emerged in the last decade as the world’s largest non-commercial international creditor, with its state-owned policy banks lending more to developing countries than the International Monetary Fund and World Bank. That lending has been subject to international scrutiny which has intensified as the pandemic caused dozens of countries to suspend debt repayments.