
China’s New Debt Sustainability Framework Is Largely Borrowed from the World Bank and IMF. Here’s Why That Could Be a Problem.
Is China's newly announced DSF up to the task?
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Is China's newly announced DSF up to the task?
In most developing countries, China's role as a creditor is modest—but in eight of the most debt vulnerable countries, Chinese lending is significant and growing fast.
In a new CGD paper, we assess the likelihood of debt problems in the 68 countries we identify as potential BRI borrowers. The big takeaway: BRI is unlikely to cause a systemic debt problem, yet the initiative will likely run into instances of debt problems among select participating countries—requiring better standards and improved debt practices from China.
During the recent IMF and World Bank meetings, all eyes were on China. As the US administration contemplates scaling back its global economic engagement, China is doing the exact opposite. But there is increasing attention being paid to risks associated with Chinese financing on two fronts.
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