China needs to provide more debt relief to borrowers amid the novel coronavirus pandemic, World Bank President David Malpass said on Wednesday
WASHINGTON (Pakistan Point News / Sputnik - 09th December, 2020) China needs to provide more debt relief to borrowers amid the novel coronavirus pandemic, World Bank President David Malpass said on Wednesday.
"China has done some debt relief but not enough," Malpass said. "Very important are the interest rate levels that are being charged. Many of the Chinese creditors are still charging very high interest rates, and then they show it on their balance sheet in China, as if it's a payable as an asset at that high interest rate."
Malpass also said China needs to recognize that many bottom-tier countries are not able to pay falling interest rates.
"There needs to be a process to reflect much, much lower interest rates in its (lending) contracts, and also in the balance sheets of the institutions," he said.
Malpass noted that China also needs to recognize how its trading partners were influencing its V-shaped recovery and interact with them and the rest of the world in a constructive way by encouraging demand.
"That V-shaped recovery has been heavily fueled by export growth. Meaning China is providing the supply and the rest of the world is providing the demand and so there's that imbalance in the global relationship. I think China could constructively make progress by encouraging more demand in China," Malpass said.
