China is sending encouraging signals about breaking a deadlock among global creditors over how to manage poor-country debt distress, according to an Indian official helping to lead Group of 20 efforts to resolve the crisis.
Efforts to restructure those debts, and rescue those economies from crisis, have been hampered for years over disagreements between traditional creditors like the Paris Club—mainly Western rich nations—and new entrants like China—the biggest lender to developing economies. There were, however, some positive signs. China softened its insistence that multilateral lenders like the World Bank take haircuts, or losses, on their debt along with all other creditors. That came amid an apparent concession by the World Bank to boost ultra-low interest loans and grants to countries in debt distress.
“There is hope that as a creditor China will be coming on board and being at the table to discuss further,” she said. “China is very much present,” in the sovereign debt discussions.