situation report

Aug 7, 2019 | 18:21 GMT

1 min read

Papua New Guinea: Prime Minister Asks China to Refinance Government Debt

What Happened: Papua New Guinea has asked China to refinance all of its $7.9 billion in government debt, Prime Minister James Marape announced after a meeting with Chinese Ambassador Xue Bing, The Canberra Times reported Aug. 7.

Why It Matters: If China agrees, it would deal a significant blow to Australia's outreach attempts to Papua New Guinea as any agreement would likely require Port Moresby to offer tangible collateral to Beijing in the form of resources or infrastructure projects.

Background: Marape's predecessor accrued the majority of Papua New Guinea's debt during his tenure from 2012 to 2014, which has reached almost one-third of its gross domestic product, with 7 percent of that debt owed to China.

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