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China, Tanzania and Zambia sign initial agreement on key railway project - CNA
(www.channelnewsasia.com)
this post was submitted on 04 Sep 2024
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I hope Tanzania and Zambia read the fine pints on the loan/inversement agreement.
What your Trump-supporting journalist says –
The actual facts –
China, the largest government creditor to emerging economies, said it will forgive 23 interest-free loans to 17 African countries and redirect $10 billion of its International Monetary Fund reserves to nations on the continent.
New sovereign debt negotiations and zero-interest loan write-offs involving Chinese creditors totalled $19 billion in 2021, the report said, although that dropped to $9 billion in 2022 and to $1.7 billion in 2023 through April, a total drop of over 90%.
The 2022 bloomberg article you cite first state:
I couldn't read much further due to the paywal.
The Bloomberg article has too few details to make conclusions. We don't know if AP and Bloomberg articles are referring to the same countries, nor whether it's a significant portion or that country's debt toward China.
The Reuters 2021 article has more details, and cite write-offs, as well as specific countries benefiting from deferrals: Angola, Pakistan, Kenya, the Republic of Congo. It's good to read there's some willingness to accomodate some countries.
Sadly that didn't prevent Zambia and Sri Lanka from defaulting. China has lended hundred of billion of dollars with unsustainable terms, and this contributed to countries defaulting. That's a bad situation for everyone involved.
https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/
https://www.lowyinstitute.org/the-interpreter/debunking-myth-china-s-debt-trap-diplomacy
Thanks for the links, it's interesting background. In that article from February 2021, The Artlantic states "There was also never a default".
There was indeed no default as of February 2021. The default occured later, in April-May 2022, so we can't expect a past article to include that information.
All major lenders need to take part in restructuring the debt indeed. That occured in 2023, and multiple lenders asked for a restructuring deal similar to the first one signed with China. I don't know about the US, but Japan/India/French lender were looking for a similar restructuration terms. That sounds fair to me.
The country's default is clear evidence the overall debt wasn't sustainable. Both Sri Lanka and its lenders have a responsibility on this. China is often the first mentioned because it was (still is?) Sri Lanka's biggest foreign lender, although it would be good to have transparency of the country's debt and interest rates on a per-lender basis, to see which ones are the most sustaonables.