Zambia Restructuring Offers Clues on China’s Willingness to Ease Debts of Poor Countries

China and other government creditors to Zambia said Saturday they will negotiate debt relief for the southern African copper producer, marking a milestone in an international effort to avoid a wave of chaotic defaults among developing countries as interest rates rise worldwide.

Zambia’s request to restructure some $17 billion in foreign-currency debt is the first real test of a process created by the G-20 in late 2020 aimed at getting China, which in recent years has become the biggest government lender to poor countries, to join international debt-relief efforts when these countries run into payment trouble. The so-called Common Framework for debt treatments also requires defaulting governments to negotiate debt write-downs with their private creditors—including international banks and bondholders—in line with those offered by government creditors.

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