China granted $ 2.1 billion in debt relief to poor countries

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China has granted debt relief to developing countries worth a total of $ 2.1 billion under the G20, the highest among group members in terms of amount carried over, the minister said on Friday. of the country’s Finance, Liu Kun.

Liu’s comments come as African countries hammered by the COVID-19 pandemic face yet another debt crisis and will need more long-term aid than the latest debt service suspension initiative of the G20 (DSSI) does offer them to avoid future problems and keep a lot – of the necessary investments ahead.

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The China International Development Cooperation Agency, the country’s aid agency, and the Export-Import Bank of China, official bilateral creditors, have suspended debt service payments from 23 countries, a total value of $ 1.353 billion, Liu said in a ministry statement. website.

The China Development Bank, as a commercial creditor, signed agreements with developing countries worth $ 748 million by the end of September, Liu said.

However, this is minimal compared to the debt of developing countries to China. The official bilateral debt of the poorest countries to the G20 countries reached 178 billion dollars in 2019, of which 63% of the total owed to China, according to a study by the World Bank.

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A third of the $ 30.5 billion in public debt service payments owed in 2021 by SSD-eligible sub-Saharan African countries are owed to Chinese official creditors, while an additional 10% is Bank-related development, according to the Institute of International Finance.

The United States, China and other G20 countries have offered aid to the world’s poorest countries – many of which are in Africa – until at least mid-2021 and will decide whether a further six-month extension is needed in April of next year.

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Liu said China is ready to step up financial assistance to developing countries and that additional support will be given to countries hardest hit by the pandemic and under intense stress, and that it will also prioritize supplying COVID-19 vaccines to poor economies.

China will also consider donating to a multilateral debt relief facility if the World Bank decides to establish one, Liu said.

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