China Shifts Approach on Overseas Lending Amid Rising Default Risks
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China has become the world's largest bilateral lender and debt collector, with $1.1 - $1.5 trillion owed from developing countries.
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Much of China's overseas lending supports countries facing financial distress, raising default risks.
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China is shifting its lending from infrastructure projects to emergency lending to mitigate default risks.
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China has increased penalty interest rates for late repayments, which may strain borrower relations.
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China aims to minimize debt distress to safeguard its Belt and Road Initiative through debt restructuring and new repayment safeguards.