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Male. Maldives is looking for a way to repay Chinese debt after the International Monetary Fund (IMF) warned Maldives of a high risk of debt crisis. It has appealed to China for relief by restructuring the debt.
Debt restructuring is not a solution: China
China has said there are discussions between the countries on providing some relief in debt repayment on loans currently taken by the Maldives government from China. However, China's ambassador to the Maldives, Wang Lixin, said debt restructuring is not a solution as doing so would hinder the Maldives from seeking further financial support from Beijing.
What did China say?
Ambassador Wang said that the technical teams of China and Maldives are handling the issue. Wang also rejected claims that China is leading Maldives into a debt trap and stressed that China has always respected Maldives and that the projects underway in the country are not being conducted with any purpose of profit or gain for China.
IMF has warned Maldives
The IMF report said that Maldives' real GDP growth is closely correlated with China's demand for services imports, indicating that the Chinese market will remain the key driver of Maldives' growth, which could pose risks to Maldives' growth.
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