Your feedback is important to us!
We invite all our readers to share with us their views and comments about this article.
Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.
Alert: If you are facing problems with posting comments, please note that you must verify your email with Disqus prior to posting a comment. follow this link to make sure your account meets the requirements. (http://bit.ly/vDisqus)
Over the past 15 years, China has fueled one of the most dramatic and geographically far-reaching surges in official peacetime lending in history.While China in 2016 joined the ranks of countries reporting to the Bank for International Settlements, the lending from development banks in China is not broken down by counterparty in the BIS data.Because these are mostly dollar debts, missing the China connection leads to underestimating balance sheets' vulnerability to currency risk.Equally plausible (and not mutually exclusive), borrowers' external debt obligations may have reached the point where repayment difficulties have begun to emerge, leaving China's development banks with considerable exposure to risky or nonperforming sovereign loans.On the supply side, because there was little or no prior credit exposure to these countries, and because some of the major official creditors were not ready to return to development lending following the HIPC Initiative write-offs, a vacuum in official lending emerged.China is not a member of the Paris Club, so there is no reason to assume that the usual approach to official debt negotiations is relevant to understanding what may happen.
Risky retirement business:
Gaining from diversification
The biggest emerging market debt problem is in America
When economic history improves with time
FOLLOW THIS ARTICLE