Understanding China's role in recent debt relief operations: A case study analysis

摘要

China has been increasingly involved in debt restructurings for low- and middle-income countries. This paper presents case studies of China's debt relief actions overseas: Iraq (2003), Cuba (2010), Seychelles (2011), Chad (2017), Zambia (2018), Mozambique (2018), Cameroon (2019), Republic of Congo (2019) and Venezuela (in progress). These cases shed light on the commonalities and particularities of China's actions, and underline the evolution of its restructuring terms. We highlight the lack of formal coordination between China and other creditors. China almost exclusively made its own decision on providing restructurings and restructuring terms. The magnitude of China's debt relief actions remains generally limited and varies across countries, depending on whether other creditors have also provided debt restructurings. China seems to have a growing preference for cancellation of accumulated arrears to nominal debt principal reduction. The debt rescheduling cases have significantly increased in recent years as well. This evolution brings China closer to the flow treatment that the Paris Club privileged in its early years of operations and the prevailing practices among private creditors.