Chinese ‘no-strings’ loans come at a cost
As government borrowing from China continues to increase, a new study released yesterday showed that Chinese concessional loans carry higher interest than any others. According to the study, released by the NGO Forum on Cambodia at a workshop in Phnom Penh, China’s average interest rate on concessional loans – which have substantially more generous terms and conditions than commercial loans – is fives times higher than the rates coming from Japan and South Korea, and four times higher than those from the European Union. “Of all donors, China offers the least favorable terms at an interest rate of 2 percent on most of its loans,” the study said. “China also provides the shortest grace period and amortization periods.”…
