China's Approach to Bailout Lending Is Different From Other Countries

The Paris Club is an informal group of creditor nations that meet eight times a year to find solutions to payment problems faced by debtor nations. China has not joined the Paris Club and instead aims to negotiate its own deals privately with countries having trouble meeting their debt service obligations. Sri Lanka's president called on China last week to reach a compromise with other lenders on debt restructuring after the IMF approved a $3 billion four-year lending program for the country. Ghana, Pakistan and other troubled debtors that owe large amounts to China are carefully watching what happens in the case of Sri Lanka and Zambia.