Zambia's President Hakainde Hichilema addresses the 76th Session of the United Nations General Assembly at U.N. headquarters in New York, U.S. on September 21, 2021. Spencer Platt/Pool via REUTERSto restructure the $6 billion it is owed by Zambia is a good sign for Sri Lanka and others that have borrowed heavily from Beijing. In April, the People’s Republic joined the African country’s creditor committee.
Unlike Zambia, Sri Lanka was not poor enough earlier to be covered by a G20 initiative that suspended $13 billion in debt service payments for some 50 countries through the pandemic. That framework was the basis for China’s change of tack on Zambia prompting it toYet China will struggle to draw such arbitrary boundaries around its lending losses: Sri Lanka’s $14 billion of foreign bonds trade for as little as 28 cents, half the level of Zambia’s $3 billion of paper. Both are in default.