Kiel Institute in the News

How to default on China—China does not always collect its debts on time

Publication Date

... The new paper by Sebastian Horn and Carmen Reinhart of the World Bank and Christoph Trebesch of the Kiel Institute for the World Economy counts 261 instances of debt relief or renegotiation since 2000. Since China is far from open about its lending, the number is probably an underestimate. It includes 149 cancellations or reschedulings of small, interest-free loans by China’s commerce ministry, mostly in the 2000s when debt relief became a cause célèbre, embraced by G7 governments and Irish rock stars. Another 28 were payment holidays granted to countries in no great debt distress as part of the G20’s response to the pandemic. That leaves 84 restructurings proper (of which 30 were also part of the G20 initiative, but to countries under financial strain). ...

Complete article (pay)


Related Topics