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China says $ 2.1 billion for debt relief for poor countries

BEIJING (Reuters) – Chinese Finance Minister Liu Kun said on Friday that China has expanded debt relief to developing countries with a combined value of $ 2.1 billion under the G20, the highest among the group’s members in terms of the amount deferred.

Liu’s comments come as African countries, hit by the Covid-19 pandemic, are facing yet another debt crisis and will need more long-term assistance than the recent G20 Debt Service Suspension Initiative (DSSI) offers to avert problems in the future and preserve much – future investment is required. .

Liu said in a statement on China that the China International Development Cooperation Agency, the country’s aid agency and the China Export-Import Bank, the official bilateral creditors, have halted debt service payments from 23 countries, with a total value of 1353 billion US dollars. Ministry website.

Liu said the China Development Bank, as a trade creditor, had signed agreements with developing countries worth 748 million US dollars by the end of September.

However, this is small compared to the debt that developing countries owe to China. A study by the World Bank showed that the official bilateral debt of the poorest G20 countries reached $ 178 billion in 2019, with 63% of the total debt owed to China.

A third of the US $ 30.5 billion public debt service payments due in 2021 by DSSI-eligible sub-Saharan African countries are to official Chinese creditors while another 10% are linked to the China Development Bank, according to the Institute of International Finance.

The United States, China, and other G20 countries have offered to the world’s poorest countries Many of them are in Africa At least until mid-2021, he will decide whether another six-month extension is needed in April of next year.

Liu said China is ready to increase financial assistance to developing countries, and more support will be provided to those worst affected by the epidemic and under severe pressure, and it will prioritize supplies of Covid-19 vaccine to poor economies.

Liu said China would also consider making donations to the multilateral debt relief facility if the World Bank decided to create one.

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