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China took on outsized debt relief burden under G20 pandemic aid plan, study finds
- Group of 20, IMF and the World Bank launched Debt Service Suspension Initiative in 2020 to ease pressure on poorer nations as Covid-19 raged
- China held 30 per cent of the claims but backed 63 per cent of payment deferrals, according to study by Johns Hopkins’ China Africa Research Initiative
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Chinese creditors offered more debt relief than their share of claims under a G20 initiative to help low-income countries cope with the impact of the coronavirus pandemic, a new study shows.
The mismatch has reinforced Beijing’s perceptions of unfair burden-sharing and its push to have all creditors do their bit for debt relief, according to the researchers.
As the coronavirus pandemic swept the world in 2020, the Group of 20 countries, supported by the International Monetary Fund (IMF) and the World Bank, launched the Debt Service Suspension Initiative (DSSI) – to ease the economic pressure on poorer nations as they fought the virus.
In November 2020, the G20 went further to launch the Common Framework for Debt Treatments, for relief beyond the DSSI.
For the 73 countries eligible for DSSI relief, Chinese creditors accounted for 25 per cent of debt due for repayment in 2020 and 2021, while multilateral lenders such as the World Bank, European Investment Bank and Asia Development Bank accounted for 22 per cent. Non-China private creditors and bondholders accounted for 40 per cent.
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