China has significantly strengthened its position as the top creditor of the world’s poor in recent years, far surpassing Japan, the World Bank said Monday, but it criticized China for not being actively engaged in the process of suspending the debt repayment of poor countries.
According to the World Bank, China’s share of the G-22’s total claims has risen from 45 percent in 2013 to 63 percent by the end of 2019. During the same period, Japan, the world’s second-largest creditor, continued to own an unchanged ratio of 15%.
This spring, the G-20 decided to suspend debt repayment services for poor countries to alleviate the economic hardship of poor countries hit by the neo-crown virus, and this debt moratorium was officially launched on May 1 for one year.
However, the International Monetary Fund, the World Bank, and the G-7 countries have requested an extension of this period. The World Bank regrets that private creditors and some countries are only partially committed to the process. The World Bank emphasized that some of the largest creditors, such as China, have not really been engaged in the process of suspending the debt of poor countries.
At the end of September, the G7 finance ministers agreed to extend the moratorium to poor countries, but at the same time the G7 encouraged all creditors to participate fairly in the process. According to the World Bank, some countries did not agree to an additional one-year extension, but a compromise on a six-month extension may be possible.
The G7 “strongly” regrets the measures taken by some countries to avoid joining the HIPC moratorium and the intentional reclassification of external loans to public institutions belonging to the country as “commercial loans”. The G-7 is not naming China. The China Development Bank has been characterized by the Beijing authorities as a “commercial bank” in order to avoid being included in the debt moratorium framework.
Recent Comments