CNBC: China under pressure to write off loans as countries struggle to repay debt during coronavirus crisis
* “Many countries under the (Belt and Road) initiative have borrowed heavily from China to invest in new projects, but the pandemic is disrupting economies and will complicate repayment plans,” said Kaho Yu, senior Asia analyst at Verisk Maplecroft.
* Yu told CNBC that currently, low-income countries under the BRI are already asking China for debt relief.
* China has had a track record of taking over assets when countries indebted to it go under.
* It will be “under pressure” to extend those loans or even write them off, analysts say.
China could find itself having to write off massive loans as countries that owe Beijing money under its massive infrastructure project struggle with mounting debts in the coronavirus fallout, analysts say.
China’s mammoth infrastructure investment plan — also known as the Belt and Road Initiative (BRI) — is highly controversial and widely criticized for saddling many countries with debt.
It is an ambitious project that aims to build a complex network of rail, road and sea routes stretching from China to Central Asia, Africa and Europe. It is also aimed at boosting trade. Chinese financial institutions have provided hundreds of billions in funding to countries involved in the BRI projects.
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WNU Editor: China is not like the West where debts and loans are written off or substantially reduced. China will want something in return if they alleviate a country's debt burden. A naval or military base here. A political concession there. A long term lease over there. A transfer of a nation's gold reserve. But write a debt off. LOL! Never!
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