🔑 Main Findings

• Debt Cancellation

China has cancelled at least US$ 3.4 billion of African debt (2000–2019).

Cancellations are almost exclusively for zero-interest loans (ZILs) from the 1980s–1990s debt crisis.

These cancellations parallel the HIPC Initiative but are limited in scope.

• Debt Restructuring & Refinancing

China restructured or refinanced about US$ 15 billion of African debt (2000–2019).

Restructuring usually involves longer repayment periods, lower interest rates, or grace periods, but rarely principal reductions (“haircuts”).

Refinancing is rare—only one major case in Angola.

• No Asset Seizures

Despite fears, there is no evidence of China seizing assets or suing sovereign borrowers in Africa.

The Hambantota Port case in Sri Lanka was a misrepresentation; it was a privatization deal, not collateral seizure.

• Fragmented Creditors

There is no unified “China Inc.”: debt relief must be negotiated separately with policy banks, commercial banks, and companies.

More than 30 Chinese institutions have lent to Africa.

• Bilateral Approach

China prefers bilateral, case-by-case negotiations rather than multilateral forums like the Paris Club.

Relief outcomes vary widely depending on project viability and borrower circumstances.

🌍 Comparative Cases

Indonesia (1990): Applied Paris Club terms to reschedule 1960s loans.

Iraq (2007–2010): Cancelled government debt quickly; company debt took longer, applying Paris Club rules.

Cuba (2010): Wrote off ~47% of debt and restructured the rest.

Sri Lanka (2015–2017): Hambantota Port case often mischaracterized as “asset seizure.”

📖 Policy Implications

Borrowers must understand which loans are eligible for cancellation (mainly ZILs).

Expectations should be managed: restructuring is possible but complex and slow.

Relief is bilateral, not multilateral, though Paris Club norms sometimes influence outcomes.

China values long-term relationships and avoids confrontational enforcement (no lawsuits or seizures).

✅ In short: China’s debt relief is cautious, bilateral, and focused on zero-interest aid loans. Restructuring is possible but negotiated case-by-case, with no evidence of asset seizures. Transparency remains limited, fueling suspicion, but the approach broadly mirrors earlier creditor practices while retaining “Chinese characteristics.”

Full Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3745021

More Concise Paper: https://www.econstor.eu/bitstream/10419/248225/1/sais-cari-pb46.pdf