China has not yet agreed to defer Tonga’s loan repayments

Although Tongan authorities believed China has deferred its loan repayment scheduled to start on September 21, 2013, it was reported the negotiation is yet to be concluded.

Matangi Tonga Online report says Xu Zhiguang, the first Secretary of the Chinese Embassy in Nuku'alofa “was surprised” that a report this week by the ADB said the repayment of the Tongan government loan from China had been deferred.

Tonga borrowed a T$119 million loan from China to pay for the rebuilding of Nuku’alofa after riots in 2006.

In September Prime Minister Lord Tu’ivakano told parliament they received a letter from the People’s Republic of China regarding Tonga’s request to defer its loan repayment scheduled to start on September 21,  2013.

He said “in their interpretation, China has approved Tonga’s request”.

Lord Tu’ivakano also said “Tonga asked for a 10 year amnesty period on its loan repayment. In turn, China asks to reduce it to five years”.

The loan has put significant strain on an already struggling Tongan economy.

Xu Zhiguang confirmed  that they have yet  to conclude the negotiation for a deferral.

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