Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250079 
Year of Publication: 
2022
Series/Report no.: 
Kiel Working Paper No. 2208
Publisher: 
Kiel Institute for the World Economy (IfW Kiel), Kiel
Abstract: 
China's lending boom to developing countries is morphing into defaults and debt distress. Given the secrecy surrounding China's loans, also the associated defaults remain 'hidden', as missed payments and restructuring details are not disclosed. We construct an encompassing dataset of sovereign debt restructurings with Chinese lenders and find that these credit events are surprisingly frequent, exceeding the number of sovereign bond or Paris Club restructurings. Chinese lenders follow a resolution approach reminiscent of 1980s Western lenders; they seldom provide deep debt relief with face value reduction. If history is any guide, multi-year debt workouts with serial restructurings lie in store.
Subjects: 
China
external debt
default
crisis resolution
official lending
hidden debts
sovereign risk
Belt and Road initiative
JEL: 
F21
F34
F42
F6
G15
H63
N25
Document Type: 
Working Paper

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