China has been busy over the past 10 years making loans to Belt and Road related developing countries, making loans to build infrastructure. However, the invasive nature and deep impact the coronavirus is having on the developing world has stopped projects and slowed down ecnomic activity – now there are no funds to repay these loans to China. China has had a strong track record of taking over assets when countries are indebted and must go under. Now instead of taking over the assets, China is under pressure to extend loans or write them off – China has spoken to the G20 regarding loans and its future with these developing nations.
Right now, low-income countries that are under BRI are already asking China for debt relief. The Belt and Road Initiative or BRI is an ambitious project that build is building a complex rail, road and sea system (all routes) leading to China. Several BRI projects in Indonesia, Malaysia, Cambodia, Sri Lanka and Pakistan have all been stalled by lockdowns. More than 130 countries are under the Belt and Road Initiative – and China will be renegotiating payments for these countries in the coming months.