Laos foreign debt doubles China claims to help relevant countries to reduce debt

(Beijing Bloomberg) Laos faced the sovereign debt crisis due to high pressure on foreign debt. Laos's largest debt -right country said that he is trying to help developing countries to reduce debt.

The Chinese Ministry of Foreign Affairs spokesman answered Bloomberg in writing on Tuesday (July 2) that the Chinese government has carried out "mutually beneficial cooperation" with developing countries including Laos and strongly supports economic and social development of these countries."At the same time, China has been doing its best to help relevant countries to reduce debt burden."

Laos Finance issued a report last Friday (June 28) that the country's foreign debt repayment doubled, from 507 million US dollars (S $ 687.76 million) in 2022 to 900 million last yearAt $ 50 million, the government will seek postponed repayment to prevent breach of contract.

China is Laos's largest creditor's rights, accounting for about half of Laos' US $ 10.5 billion in government debt, mainly involving loans to build a cross -border railway in Laos and China.As of the end of last year, the total amount of public debt and public guarantee debt in Laos was US $ 13.8 billion, equivalent to 108%of the GDP.

The China -Lauding Railway, which cost $ 6 billion, opened in 2021.Although this railway is expected to inject energy for Laos's economy, the outside world is also worried that this railway built by China will make Laos a potential debt crisis.

Asian Development Bank analyst Lane analyzed at the time that the domestic market in Laos was very small. The railway connected to the country with 7 million countries with Kunming, China did not meet the business logic, and said that "Laos's potential interests seemed to be lower than thatrisk".

Nowadays, the debt problem in Laos has surfaced. Some analysts have stated that whether Laos can get rid of the debt crisis depends to a large extent on what assistance China has given.

China is the main creditor country of many developing countries.Last month, China and Sri Lanka, which were trapped in debt default, reached a debt restructuring agreement to support Sri Lanka to achieve sustainable debt.

The United States often tells China to assist these countries to repay debts as "debt trap diplomacy."A spokesman for the Chinese Ministry of Foreign Affairs refuted the allegations and said that this was a remark of the United States to destroy the cooperation between China and developing countries. "This cannot deceive most developing countries."