Li Signals Support for Private Enterprises & Platform Economy - 'Double Support' Work - China-Angola Ties - Pushing RMB Use For Trade - India-China & the Global South
Here are the stories and pieces that I found noteworthy from the Friday, January 13, 2023, edition of the People’s Daily.
Page 1: At the top of the page is a report (English report) about Xi Jinping exchanging congratulations with Angolan President Joao Lourenco on the 40th anniversary of diplomatic relations between the two countries. Xi said that “he stands ready to work with Lourenco to take the 40th anniversary of diplomatic ties as an opportunity to deepen political mutual trust, strengthen mutually beneficial cooperation, enhance people-to-people friendship and write a new chapter in the robust development of the China-Angola strategic partnership.”
Chinese foreign minister Qin Gang, who is on a visit to Africa, will be travelling to Angola soon. Energy and debt are two key components of the bilateral relationship. The IMF estimates Angola’s external debt at $73 billion, of which around 40% is debt owed to China.
Next, there’s another commentary drawing from Xi’s CCDI speech. The key messages from this commentary are about the importance of:
having the courage to carry out self-revolution and unswervingly strengthening Party building; in this, it is important to adapt to the new situation and new requirements, without becoming fatigued or war-weary
ensuring strict political supervision and making “unremitting efforts” with regard to the eight-point regulations to change work style 制定实施中央八项规定，是我们党在新时代的徙木立信之举，只有常抓不懈、久久为功，才能化风成俗、以优良党风引领社风民风；
discipline is the ‘yardstick’ for managing the Party and is also the standard for Party members and officials to restrain their own behaviour. Only by implementing strict requirements in the whole process of Party discipline formulation, Party discipline education and discipline supervision can the whole Party form a high degree of consciousness of obeying rules and discipline 纪律是管党治党的“戒尺”，也是党员、干部约束自身行为的标准和遵循，只有把严的要求贯彻到党规制定、党纪教育、执纪监督全过程，才能使全党形成遵规守纪的高度自觉；
the fight against corruption remains a grave and complex situation, and the task of curbing the increase and eliminating the existing issues of corruption remains arduous. As long as the soil and conditions for corruption problems exist, the anti-corruption struggle will not stop for a moment 反腐败斗争形势依然严峻复杂，遏制增量、清除存量的任务依然艰巨，只要存在腐败问题产生的土壤和条件，反腐败斗争就一刻不能停；
In order to do this, it calls for:
unify our thoughts and actions with the spirit of General Secretary Xi Jinping’s important speech and the decision-making and deployment of the Party Central Committee, improve political standing, strengthen political responsibility, and pay close attention to the implementation of work… 坚定不移深入推进全面从严治党，就要把思想和行动统一到习近平总书记重要讲话精神和党中央决策部署上来，提高政治站位，强化政治担当，狠抓工作落实，为全面建设社会主义现代化国家开好局起好步提供坚强保障.
use effective political supervision to ensure the effective implementation of the decisions made at the 20th Party Congress 要以有力政治监督保障党的二十大决策部署落实见效，在具体化、精准化、常态化上下更大功夫，切实打通贯彻执行中的堵点淤点难点，推动完善党中央重大决策部署落实机制
persevere in implementing the spirit of the eight central regulations, continue to rectify hedonism and extravagance, regard formalism and bureaucracy as the key tasks of work style construction 要锲而不舍落实中央八项规定精神，继续纠治享乐主义、奢靡之风，把纠治形式主义、官僚主义作为作风建设的重点任务，推进作风建设常态化长效化
put discipline construction in a more prominent position and firmly establish Party constitution consciousness and further develop the habit among cadres of working and living in a supervised and constrained environment 要把纪律建设摆在更加突出位置，既让铁纪“长牙”、发威，又让干部重视、警醒、知止，引导每一个共产党员特别是领导干部牢固树立党章意识，进一步养成在受监督和约束的环境中工作生活的习惯
on corruption, it calls for deepening the treatment of both the symptoms and the root causes and severely crack down on those so-called ‘political swindlers’ 要深化标本兼治、系统治理，一体推进不敢腐、不能腐、不想腐，进一步健全完善惩治行贿的法律法规，严厉打击那些所谓“有背景”的“政治骗子”
continue to deepen the reform of the discipline inspection and supervision system to sharpen the sword of inspection 要发挥党委（党组）的主导作用，持续深化纪检监察体制改革，把巡视利剑磨得更光更亮，勇于亮剑，始终做到利剑高悬、震慑常在.
Next, there’s a report (English report) on Li Keqiang’s comments during an inspection of the State Administration for Market Regulation on Monday. At the National Intellectual Property Administration, Li said that “the most important thing in market competition is to fight for innovation. To protect intellectual property rights is to protect innovation and primary productive forces…” 他说，市场竞争很重要的是拼创新，保护知识产权就是保护创新、保护第一生产力，要坚持创新驱动发展. He also learned there that the average time taken by the patent review process has been cut by one third compared with five years ago.
At a data analysis center of the SAMR, Li learned that China's market entities have increased in number from 55 million 10 years ago to 169 million now, while there are more than 110 million self-employed individuals. Market entities in the eastern region account for 46.5% of the country’s total. Li said that the government had focused on the six stabilities and six guarantees over the past few years; he said that among these, “the most important thing is to stabilise employment by protecting market players, and continue to develop and strengthen market players.” 李克强说，这几年我们狠抓“六稳”、“六保”，其中很重要的就是通过保市场主体来稳就业，要继续发展壮大市场主体.
Then at a symposium, he spoke about further continuing to support businesses. He said that the combination of reform and relief measures adopted by the government have fostered and strengthened market players and played a key role in maintaining stable economic operation.
The final paragraph informs that Li Keqiang said that “currently, the economy is maintaining a trend of recovery, but market players, especially small and medium-sized enterprises and individual industrial and commercial households, are facing difficulties and some new problems. It is necessary to maintain policy stability and continue implementing the previously-introduced package of policies to stabilise the economy and the follow-up measures thoroughly. The policy of tax reduction and fee reduction should be continued and optimised, and the original policy of small-scale taxpayer VAT reduction and exemption and production and life service industry VAT deduction and exemption should be implemented. Promote the construction of major projects supported by financial instruments and the upgrading of equipment, and promote the orderly recovery of consumption of living services in light of actual conditions. Efforts should also be made to respond to the concerns of market entities, help them with problems relating to labour, credit funds, the supply of raw-materials and other issues, and prompt a quick resumption of work and production after the holiday. Adhere to the ‘two unwaverings’, protect the property rights of various enterprises according to law, boost the confidence of private enterprises, and carry forward the entrepreneurial spirit. Support the healthy and sustainable development of the platform economy, and play a better role in promoting employment and consumption, connecting production factors, and facilitating innovation. Expand the achievements of the reform of ‘streamlining administration, delegating power, strengthening regulation and improving services’ and stimulate market vitality and social creativity. All localities and departments should, under the strong leadership of the CPC Central Committee with comrade Xi Jinping at the core, better coordinate epidemic prevention and control and economic and social development, and strive to do a good job in economic work at the beginning of the year and achieve a good start in economic operation this year.” 李克强说，当前经济保持恢复态势，但市场主体特别是中小微企业、个体工商户困难较大，并且遇到新问题。要保持政策稳定性，继续抓好稳经济一揽子政策和接续措施落实。减税降费等政策该延续的延续、该优化的优化，实施好原定延续执行的小规模纳税人增值税减免、生产和生活性服务业增值税加计抵减政策。推进金融工具支持的重大项目建设、设备更新改造加快形成实物工作量，结合实际推动生活服务消费有序恢复。回应市场主体关切，帮助解决原材料供应、用工、信贷资金等困难，推动企业节后快速复工复产。坚持“两个毫不动摇”，依法保护各类企业产权，提振民营企业信心，弘扬企业家精神。支持平台经济健康持续发展，更好发挥促进就业和消费、衔接生产要素、助力创新等作用。拓展“放管服”改革成果，更大激发市场活力和社会创造力。各地各部门要在以习近平同志为核心的党中央坚强领导下，更好统筹疫情防控和经济社会发展，努力做好年初经济工作、实现今年经济运行好的开局.
Next, there’s a report on the CPPCC National Committee holding its 83rd Chairperson's Council meeting in Beijing.
Finally, there’s a report on the 80th anniversary of the Yan'an Double Support Movement. Double support means: the government and the people support the military, and the military supports the government and the people. There were revised guidelines for this work issued by the national leading group on double support work in 2019, which is headed by Sun Chulan. Those guidelines called for paying more attention to supporting the military in war preparedness and solving practical problems for officers and soldiers.
In today’s report, we learn that Wang Huning was present at the meeting, but CMC Vice Chairman He Weidong spoke. He said that the movement played an indispensable role at different stages of China’s revolution, construction and reform. Xinhua explains: “The movement, which started in the Shaanxi-Gansu-Ningxia border region 80 years ago, called for the army to support the government and cherish the people and for the government to support the army and give preferential treatment to the families of service personnel.”
He said that in accordance with the plans of the 20th Party Congress, “we must adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, do a good job in the work of double support in the new era, gather the willpower of the broad masses of the military and civilians under the banner of the party, and constantly enhance cohesion between the military, government and people and forge ahead with unity.”
He called for “stronger support for military development and reform as well as for enhancing combat readiness, and the implementation of preferential policies for the families of service personnel. He also called for the armed forces to actively participate in and support economic and social development and be ready to take up urgent, dangerous, and difficult tasks.”
On Page 7, there’s an article bylined Xu Jun on the double support work in the context of the anniversary. In this, the author informs that:
“General Secretary Xi Jinping has attached great importance to the work of double support, personally participated in major activities related to double support work, and made a series of important expositions, emphasising that ‘under the new situation, the work of double support can only be strengthened, not weakened’.” The author adds that since the 18th Party Congress, this work has “developed through inheritance and advanced through innovation.”
“The organisation and leadership are stronger, the system of policies and regulations is being constantly improved, the working mechanism has been established and is being enhanced, and work is being carried out in order to ensure institutionalisation and standardisation; the propaganda and education related to double support has been deeply embedded in people's hearts, the military-civilian joint construction and double support cultural activities are being vigorously carried out, and atmosphere of loving the people and loving the army is increasingly strong; there has been active work in service of war preparedness, and local authorities have given strong support to the reform of military building and war preparedness, and timely solve the 三后 problem, i.e., of soldiers’ concerns related to future, family and offspring; remarkable results have been achieved in supporting economic and social construction and the troops actively participated in winning the battle against poverty, supported rural revitalisation, and successfully completed urgent and dangerous tasks such as emergency rescue and disaster relief, epidemic prevention and control, and stability.” 组织领导更加坚强有力，政策法规体系不断完善，工作机制建立健全，各项工作走上制度化规范化轨道；双拥宣传教育深入人心，军民共建和双拥文化活动蓬勃开展，爱我人民爱我军的氛围日益浓厚；服务备战打仗积极有为，地方大力支持部队建设改革和备战打仗，及时解决官兵后路、后院、后代“三后”问题；支援经济社会建设成效显著，部队积极参与打赢脱贫攻坚战，支持乡村振兴，出色完成抢险救灾、疫情防控、维稳处突等急难险重任务.
“The rock-solid unity between the army, the government and the people will always be an important magic weapon for us to overcome all difficulties and obstacles and constantly move from victory to victory.” In this context, the author calls for everyone and local party committees to work together to ensure that the army achieves its centennial goal, while the armed forces should faithfully fulfil its fundamental purpose and thereby serve economic and social development.
Page 2: There’s a report based on the NDRC’s presser from yesterday (English reports by Global Times and China Daily). The focus was on inflation and price stability. China's consumer price index, a main gauge of inflation, grew by 1.8 percent year-on-year in December, up from a 1.6 percent increase in November, the National Bureau of Statistics said on Thursday. Meanwhile, China's producer price index, which gauges factory-gate prices, decreased by 0.7 percent year-on-year last month, after a 1.3 percent decline in November.
The basic argument that the officials put forward was that despite inflationary pressures, prices continue to remain stable in China.
Wan Jinsong said that “Looking forward to 2023, although international commodity prices may fluctuate and remain high and imported inflationary pressures still exist, there is a solid foundation for China's prices to remain stable. With continuous bumper harvests in grain, sufficient supply of important livelihood commodities, and strong basic energy security, we are confident that we can keep overall prices stable.”
He added that “through closely monitoring the prices of grain and energy, and improving the transport and distribution system for commodities, China was able to rein in the CPI at a time when runaway inflation was seen around the world.”
In terms of support provided to the people, Zhou Banxue said that since 2020, a total of 37.5 billion yuan in price subsidies have been distributed, benefiting 730 million people in need. Among this, around 6.5 billion yuan in price subsidies was disbursed in 2022, benefiting about 200 million people in need.
On this issue, I recommend reading this thread:
Page 3: There’s a report on Foreign Minister Qin Gang’s meeting with Gabonese President Ali Bongo Ondimba. Xinhua reports:
“China and Gabon firmly support each other on issues concerning the core interests and major concerns of the two countries, safeguard the basic norms governing international relations, and uphold international fairness and justice, highlighted Qin. The Chinese side stands ready to work with Gabon to implement the important consensus reached by the two heads of state, consolidate mutual strategic trust, deepen pragmatic cooperation and elevate China-Gabon comprehensive cooperative partnership to a higher level, Qin said. Qin also explained the essential requirements and characteristics of Chinese modernization, stressing that China will continue to support Gabon in exploring a development path suited to its national conditions, enhancing the sharing of governance experience and synergizing development strategies, jointly building the Belt and Road Initiative with high quality, and helping Gabon advance the Strategic Plan for an Emerging Gabon to realize win-win cooperation and common development for the two countries.” — It’s important to note that Gabon is currently serving as a non-permanent member of the UNSC.
The report adds: “The Gabon-China friendship has emerged stronger as the two countries promote common development and safeguard common interests, said the Gabonese president. Gabon highly agrees with China's development philosophy, and looks forward to deepening cooperation with China, to create more benefits for the people of both countries, he said, commending China for speaking up for justice in the international arena and shouldering responsibilities as a major country. Gabon has always been a reliable friend of China, and is willing to deepen coordination with China, in order to jointly defend the legitimate rights and interests of developing countries, and enhance Africa's voice in global governance, he said.”
On the page is also an article by Gong Tao, China’s ambassador to Angola. The article informs that:
“At present, China is Angola’s largest trading partner, a major project contractor and source of investment. According to Chinese customs data, Angola was China’s second largest trading partner in Africa in the first 11 months of 2022…China is willing to closely align BRI with Angola’s economic diversification strategy, and continue to provide support for major projects in line with Angola’s national development strategy without attaching political conditions.” 目前，中国是安哥拉最大贸易伙伴、主要工程承包商和投资来源国。据中国海关统计，2022年前11个月，安哥拉是中国在非洲的第二大贸易伙伴。中安经贸合作基础牢固，互补性强，长远发展前景广阔。中方愿将“一带一路”倡议同安哥拉经济多元化战略紧密对接，继续为符合安哥拉国家发展战略的重大项目提供不附加政治条件的支持。
“The Chinese government has aided in the construction of the Angolan Agricultural Technology Demonstration Center, the International Relations Institute and the Vocational Skills Training Center. Over the past decade and more, Chinese-funded enterprises have repaired or built nearly 3,000 kilometres of railways and 20,000 kilometres of roads in Angola, and built more than 100,000 sets of social housing, more than 100 schools and more than 50 hospitals. Many Chinese companies have built large farms in Angola and invested heavily in building materials, steel, daily chemicals, furniture, instruments and other manufacturing industries. At present, Chinese brands occupy the largest share of sales in automobiles, mobile phones and other products in the Angolan market. 中国政府援建了安哥拉农业技术示范中心、国际关系学院和职业技能培训中心等。10多年来，中资企业为安哥拉修复或新建铁路近3000公里、道路约2万公里，建设社会住房10多万套、学校100多所、医院50多所。许多中企在安哥拉兴建大型农场，大力投资建材、钢铁、日用化工、家具、仪表等制造业。目前占据安哥拉市场汽车、手机等产品销售份额最多的都是中国品牌.
Meanwhile, this data from Qin Gang’s remarks at the press conference with the AU’s Moussa Faki Mahamat in Ethiopia is noteworthy, just to get a sense of the scale of China’s engagement in Africa.
“Since the beginning of the new century, China has built more than 6,000 km of railways, 6,000 km of roads, nearly 20 ports and more than 80 large power facilities in Africa, Qin said, adding that China has assisted in the construction of more than 130 hospitals and clinics, more than 170 schools, 45 stadiums and gymnasiums, and over 500 agricultural projects in Africa.”
Page 4: A brief report on the CCDI publishing the 7 types of typical cases related to the four winds.
Page 7: A report on a notice by the Ministry of Commerce and PBOC on expanded use of the RMB for trade. The report says that the notice proposes 9 targeted measures. These broadly cover the domains of:
First, increase the supply of services, support banks to provide more convenient and efficient settlement and financing services, and better meet diversified needs such as foreign trade
Second, coordinate various resources and encourage relying on platforms such as pilot FTZs to ensure support funding.
Third give consideration to all kinds of subjects, encourage high-quality enterprises, first-time households, small and medium-sized enterprises, and support core enterprises in the supply chain to play a better role
Fourth, highlight cooperation and linkage, guide relevant local departments and financial institutions to strengthen horizontal cooperation, promote vertical linkage between cities, counties and districts, and ensure that policies are effective.
一是增加服务供给，支持银行提供更加便捷、高效的结算和融资服务，更好满足对外贸易等多元化需求；二是统筹多方资源，鼓励依托自贸试验区等开放平台，发挥相关资金、基金以及出口信用保险等支持作用；三是兼顾各类主体，鼓励对优质企业、首办户、中小微企业等因企施策，支持供应链核心企业等更好发挥带动作用；四是突出协作联动，指导各地有关部门和金融机构加强横向协作，推动市县区纵向联动，确保政策落地见效.
“The Ministry of Commerce said that there are two main considerations for issuing this notice. First, enterprises have demand. Using RMB to carry out cross-border trade and investment is helpful for foreign trade and economic enterprises to avoid exchange rate risks, manage capital costs and achieve stable operation. Recently, with the changes in the international economic and financial situation, the exchange rate fluctuations of major currencies have increased, the willingness of enterprises to use RMB for transaction settlement has been further enhanced, and the demand for cross-border RMB investment and financing and risk management has also increased significantly. Second, the work has a foundation. In recent years, with the active promotion of relevant departments, the scale of cross-border RMB use has steadily increased. In 2022, the cross-border RMB settlement amount of goods trade was 7.92 trillion yuan, up 37.3% year-on-year, and the cross-border RMB settlement amount for direct investment was 6.76 trillion yuan, up 16.6% year-on-year.” 商务部表示，印发该通知主要有两方面考虑。一是企业有需求。使用人民币开展跨境贸易投资，有助于外经贸企业规避汇率风险、管理资金成本、实现稳健经营。近段时期以来，随着国际经济金融形势变化，主要货币汇率波动加大，企业使用人民币交易结算的意愿进一步增强，对跨境人民币投融资、风险管理等需求也明显上升。二是工作有基础。近年来，在相关部门积极推动下，跨境人民币使用规模稳步提升。2022年，货物贸易跨境人民币结算金额7.92万亿元，同比增长37.3%，直接投资跨境人民币结算金额6.76万亿元，同比增长16.6%.
Below, I am doing a special section on India, China & the Global South. This is accessible to paid subscribers only. I am going to try and build on this going forward, so expect some of this from time to time, along with a weekend brief and a monthly reports on Chinese discourse on India going forward. If you are interested in these, please do consider upgrading to a paid subscription.
India, China & the Global South
On Thursday and Friday, the Indian government has been hosting what it has described as the Voice of Global South Summit. I thought I’d share some information and perhaps disjointed thoughts at present on what I think is going to be an important part of the conversation in 2023 at least: India and China playing a greater role and seeking greater influence in the Global South and their rivalry potentially having spillover effects.
This Voice of the Global South Summit is being held in the context of India’s G20 presidency in order to generate shared ideas and proposals for the G20. There are a bunch of ministerial dialogues that are being held on different tracks. More than 120 countries have been invited to participate in this Summit, although we don’t have a full, official list of participating countries from the government — at least I’ve not seen any as yet.
Yesterday, Indian Prime Minister Narendra Modi spoke at the inaugural session. He said:
“We have turned the page on another difficult year, that saw: war, conflict, terrorism and geo-political tensions: rising food, fertilizer and fuel prices; climate-change driven natural disasters, and lasting economic impact of the COVID pandemic. It is clear the world is in a state of crisis. It is difficult to predict how long this state of instability will last. Excellencies, We, the Global South, have the largest stakes in the future. Three-fourths of humanity lives in our countries. We should also have equivalent voice. Hence, as the eight-decade old model of global governance slowly changes, we should try to shape the emerging order.”
“As India begins its G20 Presidency this year, it is natural that our aim is to amplify the Voice of the Global South. For our G-20 Presidency, we have chosen the theme of – ‘One Earth, One Family, One Future’. This is in line with our civilizational ethos. We believe the path to realizing ‘oneness’ is through human-centric development. People of Global South should no longer be excluded from the fruits of development. Together we must attempt to redesign global political and financial governance. This can remove inequities, enlarge opportunities, support growth and spread progress and prosperity…To re-energise the world, we should together call for a global agenda of ‘Respond, Recognize, Respect and Reform’: Respond to the priorities of the Global South by framing an inclusive and balanced international agenda. Recognize that the principle of ‘Common but Differentiated Responsibilities’ applies to all global challenges. Respect sovereignty of all nations, rule of law and peaceful resolution of differences and disputes; and Reform international institutions, including the United Nations, to make them more relevant.
India’s External Affairs Minister S Jaishankar articulated the purpose of the summit: “Whether it is the impact of the Covid pandemic, climate change, terrorism, ongoing conflicts and debt crises, the search for solutions do not give due weight to the needs and aspirations of the Global South. We therefore wanted to ensure that India’s G-20 Presidency gathers that voice, the perspectives, the priorities of the Global South, and articulates that clearly in its debates.”
He talked about the need for a “Global South sensitive model of globalization,” highlighting the need for three shifts:
One, is the model of globalization: from self-centered globalization to human-centered globalization. This means shifting the focus more on development as a whole.
Two, a different approach to Innovation & Technology: From being on the receiving end of technological patronage, to deploying Global South-led innovations for societal transformation.
Three, on Development Cooperation: From debt creating projects to a demand-driven and sustainable development cooperation.
The entire summit entails 10 sessions, with six scheduled for Friday, dealing with energy, education, health and trade, technology and tourism, and there’s a foreign ministers’ meeting to offer suggestions for India’s G20 presidency.
The reason that I thought it is worth covering is because it came up in China’s foreign ministry’s press conference yesterday. This was the exchange:
“CCTV: According to reports, India will host the Voice of Global South Summit in a virtual format on January 12 and 13 to discuss issues including financial development of developing countries and energy security. Heads of government, foreign ministers and finance ministers from more than 120 developing countries have been invited so far. Some analysts noted that India, which holds the G20 presidency this year, hopes to have extensive communication with other developing countries through this meeting to substantiate the subjects and outcomes of G20 meetings. Some pointed out that by not inviting other major developing countries and emerging economies in the G20, this summit lacks representation and influence. How does China view this summit to be hosted by India?
Wang Wenbin: We have noted relevant reports. India has informed China of its considerations and plan for hosting the summit. China has all along called for greater international attention to developing countries’ shared aspirations and legitimate concerns. We greatly value the solidarity, cooperation and common development of developing countries. To galvanize international focus on development issues and deepen development cooperation, China put forward the Global Development Initiative, highlighting the need to help address developing countries’ special development challenges and deepen cooperation in key areas. This has given a strong boost to developing countries’ recovery and growth as well as efforts to speed up implementation of the 2030 Agenda for Sustainable Development.”
So clearly, Delhi did reach out to Beijing for participation, but it is unclear if Chinese officials are participating in this. The foreign ministry’s reply seems to suggest that there is no official participation. While there’s also no list of full participants from the Indian side, each session on Thursday had participants from different countries:
In this sessions on Thursdays, we saw the following countries participating:
Inaugural Session with PM Modi:
Foreign Ministers’ meeting
Environment Ministers’ meeting
Finance ministers’ meeting:
All this basically brings me to what is an emerging dynamic in the India-China relationship. In some ways, we seem to be harking back to the 1950s. Both countries are vying for deeper engagement with the developing world, albeit their comparative resource capacities being very different. Despite that, I think this year will be very interesting in this regard.
China has put out the GDI, it has yet to flesh out what the GSI will entail, and it will host the third BRI Forum this year. All of this is essentially targeted at the developing world. On the other hand, India is clearly looking at its G20 presidency as a moment to burnish its image as a leading voice for the developing world. What outcomes this is able to achieve is something to watch out for. Also, it’s worth noting whether there are any tangible benefits that countries in the Global South are likely to witness.
Just looking at India’s neighbourhood today, Pakistan and Sri Lanka are in deep financial distress, and India-China competition has some spillover in the context of the latter in particular.
After the recent floods, Pakistan estimates that it needs some $16.3 billion. Its forex reserves and bonds have tumbled
At a recent conference in Geneva, FT reports that Islamabad managed to generate pledges of $4.2 billionfrom the Islamic Development Bank, $2 billion from the World Bank and $1 billion from Saudi Arabia.
Meanwhile, Sri Lanka’s central bank governor P. Nandalal Weerasinghe is calling on India and China to agree to a write-down of their loans as soon as possible. BBC reports that Colombo has negotiated a $2.9 billion bailout from the IMF. But the money won’t be coming through until China and India first agree to reduce Sri Lanka's billions of dollars of debt. The BBC report adds:
“Beijing's lending to Sri Lanka stands at around $7bn while India is owed around $1bn. The Sri Lankan government had initially hoped to agree a new payment plan with China and India by the end of 2022. Mr Weerasinghe said it was possible an agreement could come later in January but added "this all depends on the other parties - our creditors really have to make that decision". He added that Sri Lanka had now provided them with all the information on the country's borrowings they needed. Independent analysts say China is concerned about what a substantial Sri Lankan debt write down could mean for its extensive lending to other developing countries through its Belt and Road programme. Meanwhile, India is said to be wary of getting inferior terms on debt restructuring to China, its regional rival. The US ambassador to Sri Lanka, Julie Chung, said the greater onus to move was on China, as the biggest bilateral lender. "We hope that they do not delay because Sri Lanka does not have time to delay. They need these assurances immediately," ambassador Chung told BBC Newsnight. "For the sake of the Sri Lankan people, we certainly hope China is not a spoiler as they proceed to attain this IMF agreement." But if India and China do ultimately agree to write down their loans to Sri Lanka another potential problem looms in the form of private creditors, who account for 40% of the country's external debt stock.”