Belt and Road Initiative & Bangladesh
9.1 Debt issues
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Sustainable financing of the BRI projects in the participating countries
is an important issue. Hence, dealing with debt sustainability is also a
priority for the Chinese Government.
• The Chinese Government has provided debt relief to countries which
have been suffering from debt distress, on a case-by-case manner.
Major official creditors actively participate in multilateral mechanisms
dealing with sovereign defaults, in particular the Paris Club. China is
not a member, but an observer at meetings of the Paris Club.
There are several examples how China has approached debt issues in
various countries. According to the IMF, China was a creditor to 31 of
the 36 HIPC countries, and it provided relief in at least 28 of them,
including 100 percent forgiveness for several (for example, Burundi,
Afghanistan and Guinea) (AidData database and references to debt
relief in IMF public documents).
• In case of Sri Lanka, China agreed in July 2017 to a debt-for-equity
swap for USD 8 billion loan and a 99-year lease for managing the
Hambantota Port.
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Belt and Road Initiative & Bangladesh
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