Need China's Cooperation For Debt Resolution In Countries: U.S. Treasury Secretary
Yellen said her talks with Chinese officials were "constructive", and she expects progress on that front in the coming months.
China's cooperation is needed for the resolution of debt in several distressed countries, according to U.S. Treasury Secretary Janet Yellen.
"I will continue to push for all bilateral official creditors, including China, to participate in meaningful debt treatments for developing countries and emerging markets in distress," Yellen said, ahead of the G20 Finance Ministers and Central Bank Governors' meeting in Bengaluru.
Around 55% of low income countries are close to, or already in, debt distress, according to the International Monetary Fund.
"Most urgent is the need to provide debt treatment to Zambia, and to commit to specific and credible financing assurances for Sri Lanka," she said.
Yellen is looking forward to robust discussions about the Common Framework process to help countries like Ghana and deliberations on international coordination on debt restructuring for middle income countries, she said.
According to Yellen, her talks with Chinese officials were "constructive" and she expects progress on that front in the coming months.
"...China will be constructive and understand the need of countries like Zambia and how significant the debt overhang is as a barrier to economic progress," she said. "It's something that's preventing economic reforms from simulating growth in a country that's put significant reforms in place and is ready for private investment."
In the past, the U.S. has spoken about Chinese debt in developing countries and how China can play a role in the process of restructuring debt.
Amitabh Kant, India’s G20 Sherpa, had also spoken about China’s role in the sovereign debt of countries, Bloomberg reported.
"China needs to come out openly and say what their debt is and how to settle it," Kant, the former chief executive officer of NITI Aayog said, according to the Bloomberg news report. "It can’t be that the IMF takes a haircut and then goes to settle Chinese debt. How is that possible? Everybody has to take a haircut."
The comments come ahead of the Global Sovereign Debt Round Table, which will meet in person in Bengaluru for the first time this week. The round table will be co-chaired by the IMF, the World Bank, and India—the G20 President for this year.