In the past under such circumstances, big government lenders such as the U.S., Japan and France would work out deals to forgive some debt, with each lender disclosing clearly what they were owed and on what terms so no one would feel cheated. But China didn’t play by those rules.

The actual facts –

[–] Hirom@beehaw.org -5 points 2 months ago* (last edited 2 months ago) (1 children)

The 2022 bloomberg article you cite first state:

It didn’t provide details on the value of the loans which it said matured at the end of 2021, nor did it state which nations owed the money.

I couldn't read much further due to the paywal.

The Bloomberg article has too few details to make conclusions. We don't know if AP and Bloomberg articles are referring to the same countries, nor whether it's a significant portion or that country's debt toward China.

The Reuters 2021 article has more details, and cite write-offs, as well as specific countries benefiting from deferrals: Angola, Pakistan, Kenya, the Republic of Congo. It's good to read there's some willingness to accomodate some countries.

Sadly that didn't prevent Zambia and Sri Lanka from defaulting. China has lended hundred of billion of dollars with unsustainable terms, and this contributed to countries defaulting. That's a bad situation for everyone involved.

[–] Edie@lemmy.ml 8 points 2 months ago* (last edited 2 months ago) (1 children)

Sri Lanka

https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/
https://www.lowyinstitute.org/the-interpreter/debunking-myth-china-s-debt-trap-diplomacy

[–] Hirom@beehaw.org -1 points 2 months ago* (last edited 2 months ago)

Thanks for the links, it's interesting background. In that article from February 2021, The Artlantic states "There was also never a default".

There was indeed no default as of February 2021. The default occured later, in April-May 2022, so we can't expect a past article to include that information.

All major lenders need to take part in restructuring the debt indeed. That occured in 2023, and multiple lenders asked for a restructuring deal similar to the first one signed with China. I don't know about the US, but Japan/India/French lender were looking for a similar restructuration terms. That sounds fair to me.

A debt rework between Sri Lanka and countries including Japan, India and France was also expected this week, but news of the EXIM deal took them by surprise. The three nations request comparability of debt treatment with China.

"As far as the information we have is concerned, conditions set by China are comparable to ours," Kanda said.

The country's default is clear evidence the overall debt wasn't sustainable. Both Sri Lanka and its lenders have a responsibility on this. China is often the first mentioned because it was (still is?) Sri Lanka's biggest foreign lender, although it would be good to have transparency of the country's debt and interest rates on a per-lender basis, to see which ones are the most sustaonables.