REUTERS NEXT-World Bank economist: China will need to learn to restructure emerging market debt

Increasing debt distress in emerging markets means that China, now the world's largest official creditor, will need to start restructuring debts in the same way that Paris Club lenders did in past crises, World Bank Chief Economist Carmen Reinhart told the Reuters Next conference on Tuesday.

Reuters | Washington DC | Updated: 13-01-2021 00:25 IST | Created: 13-01-2021 00:18 IST
REUTERS NEXT-World Bank economist: China will need to learn to restructure emerging market debt
Representative image Image Credit: "People are at the centre of this project, which aims to bring better healthcare services, particularly to the poor and the vulnerable," said Idah Pswarayi-Riddihough, World Bank Country Director for Sri Lanka and the Maldives. (Wikipedia)

Increasing debt distress in emerging markets means that China, now the world's largest official creditor, will need to start restructuring debts in the same way that Paris Club lenders did in past crises, World Bank Chief Economist Carmen Reinhart told the Reuters Next conference on Tuesday. "What I think China will need to do to confront this is what previous other creditors in the past had done, which is you have to restructure. And restructure big time, meaning either lower interest rates, longer maturities, write-off in principal or some combination of that," Reinhart said in a panel discussion on economic inequality.

She said that during the COVID-19 pandemic, China would need to take on a "new role" that has been an "old role" for Paris Club lenders, as Beijing is now facing for the first time wider spreads and difficulties in countries' ability to service debt on a broad scale. For more coverage from the Reuters Next conference please click here or www.reuters.com/business/reuters-next

To watch Reuters Next live, visit https://www.reutersevents.com/events/next/register.php

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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