You searched for: Content Type Commentary and Analysis Remove constraint Content Type: Commentary and Analysis Publishing Institution East-West Center Remove constraint Publishing Institution: East-West Center Political Geography Asia-Pacific Remove constraint Political Geography: Asia-Pacific Publication Year within 1 Year Remove constraint Publication Year: within 1 Year Publication Year within 10 Years Remove constraint Publication Year: within 10 Years Topic Debt Remove constraint Topic: Debt
- Author: Jonathan Pryke
- Publication Date: 03-2020
- Content Type: Commentary and Analysis
- Institution: East-West Center
- Abstract: In an atmosphere of heightened geostrategic competition, China’s Belt and Road Initiative (BRI) has raised questions about the risk of debt problems in less-developed countries. Such risks are especially worrying for the small and fragile economies of the Pacific. A close look at the evidence suggests that China has not been engaged in debt-trap diplomacy in the Pacific, at least not so far. Nonetheless, if future Chinese lending continues on a business-as-usual basis, serious problems of debt sustainability will arise, and concerns about quality and corruption are valid.There have been recent signs that both China and Pacific Island governments recognize the need for reform. China needs to adopt formal lending rules similar to those of the multilateral development banks, providing more favorable terms to countries at greater risk of debt distress. Alternative approaches might include replacing or partially replacing EXIM loans with the interest-free loans and grants that the Chinese Ministry of Commerce already provides.
- Topic: Debt, Development, Diplomacy, Geopolitics, Belt and Road Initiative (BRI)
- Political Geography: China, Asia, Asia-Pacific